high performance07

A m e r i c a n M a n a g e m e n t A s s o c i a t i o n

A Global Study of Current Trends and Future Possibilities2007-2017

Canada USA - Latin America - Asia - Pacific Europe - Middle East - Africa

HOW TO BUILD A HIGH-PERFORMANCE

ORGANIZATION

A m e r i c a n M a n a g e m e n t A s s o c i a t i o n

HOW TO BUILDA HIGH-PERFORMANCE

ORGANIZATION

A Global Study of Current Trends and Future Possibilities2007-2017

HOW TO BUILD A HIGH-PERFORMANCE

ORGANIZATION

Copyright 2007, American Management AssociationFor more information about American Management Association, visit www.amanet.org

Table of ContentsPAGE

Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

A Brief History of High-Performance Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

External Factors Influencing Organizational Performance . . . . . . . . . . . . . . . . . 7

Talents and Skills of the Workforce. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Global Competition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Faster and More Disruptive Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Political and Regulatory Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13The Influence of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Environmental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Characteristics of High-Performance Organizations . . . . . . . . . . . . . . . . . . . . . 16

A Model of High-Performance Organizations. . . . . . . . . . . . . . . . . . . . . . . . . . . 17High Performance in Practice: What the Survey Data Tell Us . . . . . . . . . . . . . . 19

Strategic Approaches: Consistent, Clear and Well Thought Out . . . . . . . . . . 19Customer Approaches: Going Above and Beyond . . . . . . . . . . . . . . . . . . . . . 20Leadership Approaches: Focused on Performance, Beliefs

and Talent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Processes and Structure: Centered Around Metrics, Customers,

and Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Values and Beliefs: Upbeat, Ethical, and Ready for Challenges . . . . . . . . . . . 24

The Context for High-Performance Organizations. . . . . . . . . . . . . . . . . . . . . . . 25Summary of Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

High Performance in the Year 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Interview with Sara Ohmet, CEO of HIPOC. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Proactive, Analytical, and Values-Driven. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Clear, Consistent, and Customer-Focused. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Well Led and Resilient. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Involved with the Community. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32High Tech and High Touch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Transparent, Healthy, and Professionally Managed . . . . . . . . . . . . . . . . . . . . 33

Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

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HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Epilogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

About this Survey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Demographic Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Table 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Table 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Table 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Table 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Table 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Table 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Table 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Table 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Table 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Performance Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

About These Categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Table 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Table 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Value Proposition Questions and Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Table 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Table 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Product Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Table 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Table 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Management Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Table 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Table 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Process Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Table 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Table 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Employee Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Table 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Table 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

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Strategy Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Table 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Table 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Customer Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Table 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Table 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Leadership Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Table 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Table 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Performance Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Table 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Table 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Culture Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Table 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Table 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Ethics Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Table 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Table 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Authors and Contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

About AMA and the Institute for Corporate Productivity . . . . . . . . . . . . . . . . . 71

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Foreword

Today’s businesses face unprecedented challenges. Leaders are confronted with increasedcompetition, globalization, demand for growing social responsibilities, technologicalchanges, and new strategic thinking. These need to be managed to build and sustain ahigh-performance organization.

To support your efforts, American Management Association commissioned theInstitute for Corporate Productivity, previously the Human Resource Institute, toconduct a study to determine the impact of today’s challenges on organizations andthe best practices associated with successful organizations. The High-PerformanceOrganization Survey 2007 asked 1,369 respondents about a series of organizationalcharacteristics that the literature suggests are associated with high performance. It alsoinquired about revenue growth, market share, profitability, and customer satisfaction.Our hope is that the answers from the study will give you guidelines to develop anaction plan for your organization’s growth.

Like all studies, there are limitations to the findings. As you will read in thisreport, we found several practices that are characteristic of high-performanceorganizations. We also identified external factors that influence corporateperformance. Note that these can increase performance or slow it, in certaincircumstances.

The study identified five integrated components of a high-performanceorganization: strategy, customer focus, leadership, processes, and values. There werespecific practices determined within each of the five components that were found tobe critical. The external influencers included talents and the skills in the workforce,global competition, faster and more disruptive change within the industry, andtechnological developments.

Through its various programs and services, including our webcasts andpodcasts, AMA is committed to help you to adjust to the external influences identifiedin the study and reinvigorate your organization to the rapidly changing environmentthat surrounds you.

Edward T. ReillyPresident and Chief Executive Officer

American Management Association


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Introduction

High-performance companies are the role models of the organizational world. Theyrepresent real-world versions of a modern managerial ideal: the organization that is soexcellent in so many areas that it consistently outperforms most of its competitors forextended periods of time.

Managers want to know more about high-performance organizations so theycan apply the lessons learned to their own companies. Of course, the goal is to ensurethat their own organizations excel in the marketplace.

The truth is, however, that it’s hard to discern exactly why some organizationsperform better than others. First, there’s the problem of determining which organiza-tions are high performers. Should analysts study only those that outperform others in their own industry? How long a time period should they conduct the assessment?And which measures, financial or otherwise, are the best ones to use?

Once analysts settle on answers to those questions, they must try to determinethe reasons that a given organization performs so well. After all, organizations tend tobe complex and unique entities. This makes it difficult to draw straightforward lessonsfrom them.

Despite these difficulties, researchers have been trying to identify and studyhigh-performance organizations for years. Much has been learned during this time. As Julia Kirby (2005) noted in the Harvard Business Review, management experts continue to build on one another’s work in order to formulate more sophisticatedideas about organizational performance.

This study continues in that tradition, building on the theoretical work of otherseven as it provides new insights about high-performance organizations. Toward this end, a team of researchers analyzed the business literature in this area and conducteda global survey looking at the characteristics associated with high performance. The High-Performance Organization Survey 2007—commissioned by AmericanManagement Association (AMA) and conducted by the Institute for Corporate Prod uctivity—asked 1,369 respondents about a series of organizational characteristicsthat the literature suggests are associated with high performance. It also inquired aboutrevenue growth, market share, profitability, and customer satisfaction. The research


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team correlated responses about market performance with responses about strategy,leader ship, customer-orientation, and other factors. Based on those findings, the teamdivided respondents into high, middle and low performers.

Like all survey data, these results have their limitations. Correlation is not causa-tion, and the data are based on self-reports rather than on external market information.Nonetheless, the results provide clues to what separates high-performance organizationsfrom their low-performance counterparts. Generally speaking, high-performanceorganizations are superior to their low-performance counterparts in the following areas:

• Their strategies are more consistent, are clearer, and are well thought out.They are more likely than other companies to say that their philosophies areconsistent with their strategies.

• They are more likely to go above and beyond for their customers. They striveto be world-class in providing customer value, think hard about customers’future and long-term needs, and exceed customer expectations. And they aremore likely to see customer information as the most important factor fordeveloping new products and services.

• They are more likely to adhere to high ethical standards throughout theorganization.

• Their leaders are relatively clear, fair, and talent-oriented. They are morelikely to promote the best people for a job, make sure performance expectationsare clear, and convince employees that their behaviors affect the success of theorganization.

• They are superior in terms of clarifying performance measures, trainingpeople to do their jobs, and enabling employees to work well together. They also make customer needs a high priority.

• Their employees are more likely to think the organization is a good place to work. They also emphasize a readiness to meet new challenges and arecommitted to innovation.

• Their employees use their skills, knowledge, and experience to create unique solutions for customers.

The study also indicates that even high-performance organizations couldimprove in various areas. It found, for example, that high performers are much morelikely than low performers to report that their organization-wide performance meas-ures match their organizations’ strategies. This was, in fact, the single largest differencebetween the two groups. Even so, the data show that higher performers, taken as awhole, could do considerably more to match their performance metrics with theirstrategies.

There’s likely a lesson to be learned here: like great athletes, even high-performanceorganizations must continuously strive to improve and “work on their games.”Without the passion for improvement, they are unlikely to remain high performersfor long. After all, there’s no shortage of business leaders who are working hard toensure that their own companies reach the top echelons of organizational excellence.

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11


A Brief History of High-Performance Theory

Although the concept and measurement of

high-performance organizations are relatively

new to management theory, they have roots

that extend at least back to the beginning of the

Industrial Revolution.

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At the dawn of the Industrial Revolution, various employers strove hard to changeworkers’ attitudes from an agrarian or craft-tradition mindset to a factory mindset.Workers had to develop new habits such as punctuality, regular attendance, mechanicalpacing of work effort, and standardization.

Some observers of the day held a dim view of the prevalent work ethic. Oneauthor wrote, “If a person can get sufficient (income) in four days to support himselffor seven days, he will keep holiday the other three, that is, he will live in riot anddebauchery” (Powell 1972, quoted in Briggs 1969). This line of thinking was pickedup by others, and theories emerged that bolstered the idea of controlling workersthrough policy, structure, and organization.

Another line of reasoning was championed by Robert Owen, a successful cotton manufacturer in England during the early 1800s, who chided his colleagues for failing to understand the human element. According to Owen, managers spenttime improv ing machines, specializing labor, and cutting costs, yet they made noinvestments in workers themselves. Owen said that money spent on improving laborwould “return you not 5, 10, or 15% for your capital but often 50 and in many cases a 100%” (Butt 1971).

These early viewpoints provide the roots for thinking about how to develop ahigh-performance organization. As industry grew, so did the theories about how toproduce more or better products in the factories, and the dichotomy between focusingon people versus focusing on tasks and structures continued to evolve.

Scientific Management and Other TheoriesMany of the next theories to surface focused on improving productivity. One of thebest-known ideas—Scientific Management—came from Frederick Taylor in the U.S.during the late 1800s and early 1900s. Taylor said, “The principal object of managementshould be to secure the maximum prosperity for the employer, coupled with the maxi-mum prosperity for each employee.” He placed the responsibility for productivity onmanagement rather than on workers, saying that “it is the manager’s job to design thejobs properly and to offer the proper incentives to overcome worker soldiering” [a termthat Taylor used to mean “taking it easy”] (Taylor 1903).

During the early 1900s, Frank and Lillian Gilbreth emerged on the managementscene with a similar method for increasing productivity. Frank Gilbreth conductedmotion studies in manufacturing; Lillian wrote one of the earliest contributions to theunderstanding of the human factor in industry, The Psychology of Management(1914), and she is known for bringing a human element into scientific management(Wren 2005).

Meanwhile, during the early 1900s and on the other side of the Atlantic, MaxWeber in Germany and Henri Fayol in France offered their perspectives on the grow-ing interest in increasing productivity. The problem, as Weber saw it, was how a largeorganization might function more systematically. The answer, he concluded, wasbureaucracy, which meant management by the office or position rather than by a particular person (Parsons, ed., 1947).

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In contrast, Fayol touted the importance of managerial ability—as opposed to only job design and structure—to improve organizational performance. He feltmanagers needed particular attributes:

• Physical qualities such as health and vigor;

• Mental qualities such as the ability to understand, learn, and adapt;

• Moral qualities such as energy, firmness, and a willingness to accept responsibility;

• A general education that encompasses matters that do not belong exclusivelyto the function performed;

• Special knowledge particular to the function, be it technical, commercial,financial, managerial, and so on;

• Experience, including knowledge arising from the work itself and lessons frompersonal experience (Fayol, trans.; Storrs, 1949).

Fayol also developed “principles of management,” which he felt should betaught in universities. They included items such as division of work, authority, discipline, unity of direction, subordination of individual interests to the generalinterest, remuneration, centralization, stability of tenure of personnel, and esprit decorps (Wren 2005).

Education and Training Focus on PerformanceThe ideas of these pioneers spread beyond factory management to general management,influencing not only the business world but academia as well. In 1881, the WhartonSchool of Finance and Economy at the University of Pennsylvania opened its doors asthe first undergraduate school of business. It was followed in 1898 by the University ofChicago and the University of California at Berkeley. By 1900, the Amos Tuck Schoolof Administration and Finance at Dartmouth College and (in 1908) Harvard followed,creating a business curriculum to teach managers how to manage organizations forgreater productivity. Training also became available outside of the university system.American Management Association (2007), for example, traces its origins back to1913 with the founding of the National Association of Corporation Schools, whichlater became the National Association of Corporation Training.

Along with education and training came management research and a growinginterest from academia in the challenges associated with trying to improve productivity.By 1933, Elton Mayo, who was on the faculty at the Wharton School of Finance andCommerce, found that workers’ performance could not be explained by any one factor.He emphasized the need for “effective collaboration” and a restoration of the “socialsolidarity” in a changing world that left people without stability, purpose or norms(Mayo 1933). He is credited with forming the Human Relations Movement that emphasized interpersonal relations, listening, communication, and sociohuman skills for themanager/leader. One of his ideas was that leaders should balance the needs of theworker with the economic needs of the organization.

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Management Theory Enters the Modern AgeThe Human Relations Movement had its most important influence on managementthought from about 1930 to 1950. During this time, there was inquiry into groupdynamics, participation in decision-making, leadership, and motivational appeals togroup members. In addition, there was a search for analytical tools and conceptualmodels to explain the interactions of the formal and informal aspects of organizations(Wren 2005).

After World War II, rapid growth in the economy prompted management scholarsto shift from a shop-level management orientation to general management theory.George Terry (1960), in his book Principles of Management, defines management as“the activity which plans, organizes, and controls the operations of the basic elementsof men, materials, machines, methods, money, and markets, providing direction andcoordination, and giving leadership to human efforts, so as to achieve the soughtobjectives of the enterprise.”

Peter Drucker (1954), who is known as the greatest guru of management practice,introduced the idea of measuring success against market potential. He focused on the innovation of products and services and on improving how these were made ordelivered. In addition, he studied other performance-related factors, including pro-ductivity, profitability, physical and financial resources, manager performance anddevelopment, worker performance and attitude, and public responsibility. Druckeralso consulted with managers and encouraged them to ask the right questions, such as “What is our business?” and “What is value to the customer?” According to Drucker,“The important decisions are strategic decisions. Anyone who is a manager has to makestrategic decisions, and the higher his level in the management hierarchy, the more ofthem he must make” (Drucker 1954).

But not every expert focused on strategy or improved human relationships asthe keys to improving performance. Paul Lawrence and Jay Lorsch (1969) took theposition that organizational structure is critical to performance, and they developed atheory that showed managers how to analyze issues important to structure, such asthe rate of change in business environment and the relative certainty of business-relatedinformation. Lawrence and Lorsch found that the more successful firms were thosethat adjusted to their relevant environments.

As time went on, managers became perplexed by an overabundance of theoriesabout how to boost organizational success. Andrew Van de Ven (1999) described theperiod of the ’70s as a “buzzing, blooming, confusing world of organization andmanagement theories resulting in a tower of babbling and fragmented explanationsof differing paradigms.” Yet, theorists tended to fall into two camps—those whoseprofessional interests clustered around organizational behavior and those whoseinterests clustered around business policy and strategy (Pearce, 2003). Organizationalbehaviorists looked to leadership, motivation, and group behaviors within the organ-ization. Policy and strategy theorists looked to work process and measurement. In asense, the theories still tended to fall into the two classes that had emerged long before:those that focused on people versus those that focused on tasks and structures.

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There were advances in both areas. In 1974, for example, Ralph Stogdill wrote that“four decades of research on leadership have produced a bewildering mass of findings…the endless accumulation of empirical data has not produced an integrated under-standing of leadership.” But by the 1990s, Bernie Bass had published new work showingthat transactional and transformational leadership can be found across all parts of theglobe and in all forms of organizations. Further, transformational leader behaviors wereshown to relate positively to organizational performance.

A wealth of data also emerged to show the impact of individual worker behavior on factors such as turnover, absenteeism, and unhealthy lifestyles. Likewise, wise manage-ment of employees became more widely accepted as a way of boosting productivity anddecreasing operating expense (Cascio and Wynn 2004).

W. Edwards Deming looked more at tasks and processes. After decades of boost-ing the success of corporations in Japan, Deming (1986) became a major managementforce in the U.S. He identified various organizational “diseases” that caused U.S. industryto go into decline, and he argued that 95% of all errors in organizations could be attrib uted to the systems under which people worked rather than to people themselves. The quality movement in the U.S., which emerged in the 1980s, is directly attributed to Deming.

After the quality movement, organizations adopted other tools and technologiesto assist them in developing and maintaining high performance. Six Sigma, computertechnology, and “just-in-time” inventory management are examples that shaped planning and work processes in ways that substantially reduced cost or improvedtime-to-market, customer satisfaction, and the like.

Comparing and Measuring PerformanceIn 1982, when Tom Peters and Bob Waterman produced In Search of Excellence, theidea of comparing, identifying, and analyzing the best-performing organizations cameinto vogue (Kirby 2005). Since that time, many studies have used comparison techniquesto try to tease out what sets high-performance organizations apart. For example, inBuilt to Last, Jim Collins (1994) took a somewhat similar approach.

But the goal of identifying the most durable high performers through the art ofcomparison is a difficult one to achieve. One of the problems is that maintaining highperformance is a major challenge for any organization. While U.S. business professionalsbought In Search of Excellence and Built to Last in droves, many of the profiled companieswere unable to sustain high performance. Foster and Kaplan, in their book Creative

5


More high-performance studies are likely to emerge in the future,

partly because the business environment continues to shift and partly

because the science of analysis continues to improve.

6

Destruction, make a strong case that surviving is not the same thing as performing.Over the last decade about half of the Built to Last companies have not been able tosustain a high-performance level—roughly the same percentage of In Search ofExcellence companies that struggled in the decade following the publication of Peters’and Waterman’s best-selling book.

Even though the “right” method to determine high performance has not surfaced,the quest to find it continues. In 2007, for instance, James Neelankavil and DebraComer published the results of a large study in which they analyzed the annual rankingsof companies according to the four performance criteria used by Fortune to determinethe best of the best (return on investment/equity, net profits, total assets, and revenuesdimensions).

There are also ongoing debates about how to measure corporate performanceamong corporations. For example, are total assets or return on investments truly thebest measures of performance in an age when so much market value seems to stemfrom “intangibles”? These sorts of debates are increasing among economists, consultants,and business professionals.

There are also debates about the most important metrics within companies.Kaplan and Norton (1992) are known for saying, “What you measure is what you get.”They are the creators of the “balanced scorecard,” a system in which measurements aremeant to drive performance. Davenport and Harris, authors of Competing on Analytics(2007), suggest that organizations will increasingly use data as a competitive advan-tage. They argue that the frontier for using data is not just in measurement but also inidentifying the most profitable customers, determining the right price, acceleratingproduct innovation, optimizing supply chains, and identifying the true drivers offinancial performance (2007).

More high-performance studies are likely to emerge in the future, partly becausethe business environment continues to shift and partly because the science of analysiscontinues to improve. As Julia Kirby (2005) argued in the Harvard Business Review,today’s management experts are still building on one another’s work, developing moresophisticated survey instruments, mining richer data with better tools, and creatingtheories with greater explanatory powers about high performance.

But if history provides a lesson, it is that no single factor or metric guaranteesorganizational success. Rather, high performance is a composite of many things.Practicing managers have much to learn from high-performance research, but theyshould beware of easy answers that promise long-term high performance.

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7

External Factors Influencing Organizational

Performance

This section highlights the primary factors that

drive businesses to focus on and attain high

performance.


7

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The external factors that influence organizational performance range from the skilllevel of the labor force to the nature of today’s business environment. Of course, theseelements are dynamic, not only influencing the need for organizational performancetoday but affecting how businesses will strive for peak performance in the future.

Before we describe external factors of importance, it is important to mentionthat we do not discuss in this section theoretical models that attempt to describe andexplain high performance in organizations, ground that was covered in the previoussection. However, it should be noted that theories of high performance continue toemerge and evolve, influencing how organizational members view such performanceand the strategies that can be adopted for attaining such performance.

Talents and Skills of the WorkforceIf businesses are to become high-performance organizations, they must have employ-ees who possess the right skills, abilities, and mindsets. When sufficient numbers ofappropriately skilled workers cannot be found or trained, organizational performanceis bound to suffer.

In 2006, about 9 out of 10 U.S. manufacturers polled by the National Associationof Manufacturers (NAM) said that they couldn’t find enough skilled workers to fill thejobs needed to run their shops. In fact, NAM reported that some 80% of its membermanufacturers declared the shortage of skilled workers dire enough to adversely affecttheir production schedules (Williams 2007).

Research from Sirota Survey Intelligence (2006) found that recruiting concerns go far beyond the manufacturing sector. Its poll of HR professionals in 2006 found 64%identifying recruiting as their leading challenge. Sixty-eight percent predicted the situa-tion would continue at least through 2009. Also in 2006, Watson Wyatt reported that itspoll of 1,100 employees and 262 organizations across the U.S. found 63% of employersadmitting that they had problems finding workers with skills their firms needed.

Keeping skilled employees onboard can be problematic, too. Thirty-nine percentof respondents to the Watson Wyatt (2006) poll identified retention of qualified workersas a major issue for their organizations.

Talent shortages are not limited to U.S. employers. “In both developed anddeveloping countries, the evolving workforce is creating a talent shortage,” declared anApril–May 2007 article in Chief Executive. The publication pointed to aging and retir-ing Baby Boomers as one underlying cause of the dwindling talent pool, adding thatrapid and extensive growth in developing nations has also contributed. It argues,based on information from the U.S. Department of Commerce, that three-fifths of thenew jobs in this century will need skills that only about a fifth of today’s U.S. workershave. “Clearly,” it reports, “it’s time for talent to be viewed as a significant issue inboardrooms worldwide” (Appel 2007).

Echoing the international concern about finding skilled talent, nearly 3 out of 10 employers worldwide said they would have hired more workers last year but wereunable to find qualified applicants. A Manpower, Inc., survey included nearly 32,000employers in 26 countries. In the Americas, problems were greatest in Peru, where46% of employers reported a shortage of qualified workers. Canadian firms fared

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best with challenges noted by only 26% of organizations. Forty-five percent of U.S.firms said their hiring would have been greater if skilled applicants had been available.In Asia, about a third of employers reported recruitment problems, though as many as45% had trouble with staffing in Japan. Europe, the Middle East and Africa fared bet-ter, with South African employers reporting the greatest hiring difficulties (37% ofemployers) (Manpower, Inc., 2006).

Workers’ influence on organizational performance is undeniably crucial. AHewitt Associates study of 100 large U.S. companies in 2006 concluded that thosewith formal programs in place to identify and develop skilled workers and high-performance talent consistently achieved higher rates of shareholder return (Zielinski2006). Further, 45% of 251 executives of global firms polled by Accenture the sameyear identified finding and keeping skilled workers as an important driver of theirfirms’ financial performance (Accenture 2006).

Finally, an April 2007 talent management survey conducted by the Institute forCorporate Productivity found that among the most important drivers of talent man-agement are the need to execute strategies, stay competitive in the marketplace, servecustomers well, and drive innovation—all elements inherent in high performance.

Global CompetitionThe fact that the majority of organizations participating in the AMA/Institute forCorporate Productivity survey detailed in this report classified themselves as global ormultinational in scope speaks to the influence of globalization in today’s businessworld. The global economy and, with it, global competition are growing at a fast clip.

The Society for Human Resource Management declared in 2007 that “since2001, the global economy grew at a rate faster than at any point in the last 45 years.”Newsweek International editor Fareed Zakara added that China and India, alone, havecontributed significantly to the world’s trade, accounting for the addition of an esti-mated “2 billion to 3 billion new producers, consumers, and capitalists” (Smith 2007).

That globalization exercises a direct effect on organizational performance wasacknowledged by leaders of global firms in a 2006 Accenture poll. Sixty-one percentof the 251 executives surveyed worldwide called the ability to capture a greater shareof the market a vital driver of their firms’ financial performance (Accenture, 2006).Similarly, authors Atul Vashistha and Eugene Kublanov observe that leading organiza-tional globalization initiatives can position firms for success across multiple businessunits. The two suggest viewing international expansion as “growth and qualityimprovement opportunities” as well as a mechanism for transforming such factors as company structure, process design, communications, capabilities, and more(Vashistha and Kublanov 2006).

Business expansion across international borders logically opens doors to new markets, but it also opens organizations to new competitors—a double-edged sword forsome companies. Indeed, in 2006, The Ken Blanchard Companies’ 2006 Corporate IssuesSurvey found more than 6 out of 10 HR and training professionals at internationalorganizations called competition their firms’ greatest challenge and the pressures attendantto it the year’s top issue (The Ken Blanchard Companies 2006).

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At the same time, many executives have recognized the opportunities inherent inincreased global competition for customers. Maintaining a strong customer focus andresponding to changing markets were cited as important drivers of financial performanceby executives polled by Accenture (2006).

The competitive landscape exerts an influence on corporate structure, in turnaffecting organizations’ abilities to align their structures with their strategies. In 2006,balanced scorecard experts Robert S. Kaplan and David P. Norton looked at structuralchange and resource alignment to support strategic execution, making the point that theadvent of global competition heralded a shift in corporate structure from centralizationaround products or locations to a more process-centered and flexible model. Someexperts have labeled these flexible businesses as “Velcro” organizations, alluding to theirability to separate and rejoin organizational components into various configurations.

Kaplan and Norton (2006) note that today’s organizations are challenged by thefact that intangible assets, such as knowledge workers and research and development, areplaying an increasing role in corporate success, and by the fact that globalization has dis-persed those assets worldwide. These factors are driving companies to get better at align-ing both physical and intellectual resources, internally and externally, around the world.

Faster and More Disruptive ChangeThe pace of change is becoming both faster and more disruptive, according to resultsfrom the AMA/HRI Building Organizational Agility and Resiliency Survey 2006. Thevast majority (82%) of 1,472 respondents reported that the pace of change experi-enced by their organizations had increased compared with five years previously, and amajority (69%) said that their organizations had experienced disruptive change—thatis, severe surprises or unanticipated shocks—over the previous 12 months(AMA/HRI, 2006).

An analysis of the survey results also found that companies that, according toself-reports, perform better in the marketplace are also more likely than their low-performance counterparts to view themselves as agile and resilient, see “change as anopportunity,” and view themselves as having better change capacities at the individual,team, and organizational levels. Because such companies are more likely to say thatthey “induce change and force others to react,” the pace of change is unlikely to slowin the near future. There are simply too many high-performance organizations that see change as a competitive advantage.

Therefore, agility and resilience are likely to be characteristics of organizations thatsustain performance over long periods of time. The AMA/HRI Building OrganizationalAgility and Resiliency Survey 2006 defined resiliency as “the ability to absorb, react to,

…agility and resilience are likely to be characteristics of organizations

that sustain (high) performance over long periods of time.

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and even reinvent who you are as a consequence of change” and agility as “the ability tomove quickly, decisively, and effectively in anticipating, initiating, and taking advantage of change.” The research team on that report came to view agility and resiliency as two sides of the same coin of “adaptive capacity,” or the capacity of organizations to manage change.

Companies with high adaptive capacities will drive other organizations to performbetter in the future. Of course, being able to sustain over-average performance foryears at a time is a rare characteristic. The University of Minnesota Spencer Professorof Strategic Management Alfred Marcus notes that just “3% of the 1,000 largest U.S.corporations consistently and significantly outperformed their industry’s average”between 1992 and 2002.

Yet, such companies are likely to have a disproportionate impact in terms of theirability to make the business environment more disruptive and fast-paced. They tend toshare certain characteristics, according to Marcus. These include “profitable growth,not growth at any cost,” innovation, flexibility, alliances with other organizations thatenable growth and help mitigate risk, an understanding of customers and their needs,and a mastery of distribution channels (Marcus 2006).

Other studies have found other sets of change-friendly attributes. A 2007 surveyby Michigan-based Denison Consulting further quantified the benefits of a culture able to respond quickly to change. Said research analyst Ryan Smerek, “Companies that demonstrate higher levels of performance in key areas of organizational culture…tend to deliver better results in return-on-assets, sales growth, and shareholder value.”Smerek and his team analyzed data from 102 companies that responded to a Denisonculture survey over an 8-year period and assessed culture in terms of a firm’s adapt-ability, consistency, mission, and involvement, examining such characteristics as customerfocus, change initiatives, team orientation, and company values. “Companies with thebest organizational culture scores earned an average return-on-assets of 6.3 percent, vs. 4.5 percent for firms with the lowest organizational scores,” Smerek reported. Top-scoring firms also achieved higher shareholder value: “market-to-book values of440 percent as compared to 350 percent for firms with the lowest culture scores”(Denison Consulting 2007).

As such companies thrive, their competitors are likely to try to imitate theirattributes and characteristics. This dynamic will make for an increasingly competitiveglobal business environment.

TechnologyTechnology and performance have been intertwined since the dawn of human civili zation.In learning to create and exploit new technologies, humankind has been able to powerfullyinfluence the world. Consider, for example, how the evolving understanding of heat andcombustion led to technologies such as metallurgical techniques, wood stoves, steam-powered engines, coal-powered plants, electricity, automobiles, large-scale machinery,and, eventually, most of what constitutes the modern workplace.

Try to imagine the performance levels of workers without such technologies.How much could be accomplished by a single farmer without the advent of modern

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farm equipment? How productive would construction workers be without trucks andpower tools and bulldozers? How many widgets could be manufactured withoutmachines?

The late historian Alfred Chandler showed how various technologies—fromthe railroad to the cable—allowed companies to expand into enormous enterprisesthat required professional management in order to perform well. And economichistorian Paul David has shown how new technologies can make organizationsmuch more productive, but only after they’ve learned how to best utilize those tech-nologies. That’s why it took decades for enterprises to reap the benefits of electricityand it has taken years for businesses to learn how best to harness computerization(Harford 2007).

A March 2007 article on the New York Times Website mentions a 2007 report on the role of technology in the U.S. economy that found that “money spent on com-puting technology delivers gains in worker productivity that are three to five timesthose of other investments.” Issued by the Information Technology and InnovationFoundation, a research organization backed by IT companies, online auction site eBay, and the Communications Workers of America, the study suggests that the performance of certain industries—including health care, electric utilities, educationand transportation—could be raised through the wise use of information technology.

Not all economists are convinced that investments in technology have such alarge payoff, however. “It could be that investments here pay off more than otherinvestments, but the evidence is still not in, in my view,” noted economist Robert E.Litan of the Ewing Marion Kauffman Foundation (Lohr 2007).

Other studies suggest that technology can be a double-edged sword, actuallyreducing performance when it’s misused. Sixty percent of contact-center professionalssurveyed in 2005 said, for example, that technology problems were the main reason forlow productivity in their organizations. Four out of five also said technology problemsnegatively impacted the customer’s experience. Surprisingly, 54% of the respondentssaid their callers were the ones who told them about the technology problems. Only10% of the respondents reported having any methods in place for testing their ownautomated systems. In some industries, up to 80% of calls are handled by automatedsystems, so technology problems can have a major effect on efficiency and quality ofservice (“4 Out of 5,” 2005).

Future technologies are likely to show the same patterns, raising performance levels when used well but hindering performance when used poorly. Radio frequencyidentification (RFID), for example, has the potential to save firms significant amounts of money along the supply chain. A 2006 report by the International LabourOrganization (2006) goes so far as to predict that RFID will eliminate “routine ware-housing tasks” and that the technology could save the retailer Wal-Mart $8.35 billionannually by 2020.

Many other types of technology—from robotics to biotechnology to nanotech- nol ogy—promise to boost the performance of individuals and organizations in coming decades. But only time will tell how successfully organizations can leveragethese technologies to their competitive advantage.

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Political and Regulatory ChangesAs most employers understand, laws and regulations can have a major impact on theirbusinesses. In fact, respondents to the AMA/HRI Strategy Execution Survey 2006 sawgovernment regulations as a major barrier to the execution of organizational strategy,second only to a scarcity of resources. Moreover, those respondents expected governmentregulations to remain one of the top barriers to execution 10 years into the future.

Some other surveys corroborate the importance of regulations. Thirty-six percent of the global leaders who participated in a 2006 Accenture survey called theirfirms’ responses to regulations a top driver of financial performance. Similarly, in2006, nearly two-thirds of 1,400 senior leaders in international businesses toldPricewaterhouseCoopers that changing regulatory environments was the biggestobstacle they faced in guiding their organizations to success (Scalfane 2006).

But it isn’t just regulations that affect organizational performance. In a globalmarketplace, the political makeup of nations can often determine success or failure ina given region. In fact, political instability topped the list of risks threatening globalorganizations on Aon Corporation’s 2006 Political & Economic Risk Map, a rankingof countries based on factors including politics, civil unrest, terrorism, regulatoryissues, and other matters. The firm ranked legal and regulatory issues immediatelybehind political concerns (Aon Corporation 2006).

Sociopolitical issues across the world have become increasingly important tobusinesses for two reasons. First, of course, is globalization itself. Second, someargue that political issues are more dynamic today than they were several decadesago, and the global media bring them to the world’s attention more quickly.Moreover, the relations between and among nations have become more complex inrecent years. “The challenge,” according to McKinsey & Co. executives, “is to find away for companies to incorporate an awareness of sociopolitical issues more sys-tematically into their core strategic decision-making processes,” recognizing thatsuch issues can present not only risks but opportunities as well. The keys to manag-ing threats and opportunities are the ability to plan proactively, craft industryalliances, and stay informed about social and political trends (Bonini, Mendonca,and Oppenheim 2006).

The Influence of Ethics Do organizations that make a commitment to ethical operations perform better? In 2006, Baylor University professors and two of five coauthors of “Ethical Attitudes in Small Business and Large Corporations”—a survey sent to 10,000 U.S. business

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The keys to managing threats and opportunities are the ability to

plan proactively, craft industry alliances, and stay informed about

social and political trends. (Bonini, Mendonca, and Oppenheim 2006)

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professionals in 1985, 1993, and 2001—concluded that an ethical atmosphere in anorganization was good for efficiency and the bottom line. Their reasoning was thatethical attitudes tend to translate into ethical behavior, in turn enabling those whodeal with the organization to develop trust in the system. A lack of trust in an organi-zation’s fair dealing means all transactions must be monitored more closely, whichtakes time and drives up costs (Shaw 2006).

According to a 2005 white paper by ISR, research from DePaul University showedthat companies with a strong, public commitment to ethics had a higher market valuethan organizations that had no ethics policy and also than organizations that adoptedan ethics code and did nothing else. Those with a public commitment to ethics had anadded market value of $10.6 billion. Companies that had adopted an ethics code anddid nothing else had an added market value of $8.1 billion. Those organizations thathad no code had the lowest added market value—$3.24 billion (“Making,” 2006).

Research by the Chartered Institute of Personnel and Development (CIPD) in 2005 also spoke to an ethics/performance connection, concluding that companieswith well-developed corporate value systems tend to perform better if those values are inculcated into the sense of purpose employees bring to their work. “To delivereffective performance, organizations need to work hard to create a shared vision andvalues among their people,” said Angela Baron of CIPD. “Mission statements and strate-gic decrees from on high are not enough. People need to feel a sense of purpose which isreflected in a positive environment. If organizations are going to get the discretionarybehaviors from individuals which are so important to business performance, they mustwork to create supportive cultures which encourage innovation and performance”(“The Stat,” 2005, p. 15).

A reputation as an ethical company can also serve as a magnet for top talent.Stanford University surveyed 800 MBA students from 11 North American and Europeanbusiness schools in 2005, asking each to rank attributes they deemed important factors in making employment choices. The students’ third-place choice—cited by 77% ofrespondents—was a potential employer’s reputation for ethics and caring, leadingresearchers to conclude that companies seen as highly ethical and with a reputation for social responsibility may have an edge in recruiting the top talent needed to drive organizational performance (Weber 2005).

Various scholars have focused on what some business professionals see as a trade-off between a focus on the bottom line and a focus on ethics and social responsibility.


If organizations are going to get the discretionary behaviors from

individuals which are so important to business performance, they

must work to create supportive cultures which encourage innovation

and performance.” (“The Stat,” 2005, p. 15)

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In a 2005 article, Ivey Business School Professor of Strategy Pratima Bansal argues that “there does not have to be a tradeoff between economics and ethics.” Bansal notes,“There is a compelling business case for firms to operate in the overlapping space whereactivities are both financially profitable and socially and environmentally responsible.In this middle ground, firms reduce costs, mitigate risks, protect their reputations,stimulate innovation, and find new, sustainable sources of economic well-being”(Bansal 2005). In short, ethical and socially responsible actions can, when undertakenwisely, help an organization optimize its performance.

Environmental ChangesThe idea that the natural environment is a factor in organizational performance is anew and still controversial one. The so-called sustainability paradigm assumes that acompany should be not only financially sustainable but socially and environmentallysustainable as well. Some are calling this the “triple bottom line.” The underlying ideais that in a highly integrated, global business system, the long-term performance oforganizations will be based on the long-term health of societies and the natural environ-ments on which they rely.

Others see the issue in simpler and starker terms. “Environmental matters havefinancial, operational, and reputational impacts,” declared a February 2007 article inLondon’s International Financial Law Review. The publication advises that “irrespec-tive of whether one accepts the socio-moral argument that companies have an ethicalobligation towards the environment, a proactive approach to environmental riskmanagement is essential because failure to comply with environmental regulation (or to adequately respond to environmental risks) can have big financial implications”(“It’s Not Easy,” 2007).

A specific exploration into the relationship between compliance with environ-mental management standard ISO 14001 and business performance was the focus of a 40-organization study in 2006. Participating firms reported their procedures forcompliance with the standard, leading researchers to conclude that “standardizationof the organization’s handling of environmental issues [leads] to better organizationalenvironmental performance…and a positive impact on employee discretion.” However,the study did not find any evidence supporting better business performance resultingfrom compliance with the ISO standard (Link and Naveh 2006).

Rumblings about environmental changes and organizational responsibilities aside,some quantification of such concerns as they impact business leaders was provided by a 2007 survey conducted by the Institute for Corporate Productivity. The researchconcluded that “environmental issues are not yet seen as issues that drive or will drivekey business decisions to any major extent.” This isn’t to say, however, that many environmental issues will not become much more important over time. Indeed, dueto compliance requirements as well as social pressures, organizations’ performancemight well come to rely, at least in part, on their ability to effectively implement “greenpractices.”

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Characteristics of High-Performance Organizations

This section presents the characteristics of

high-performance organizations. First, we present

a model of high-performance organizations.

Second, we look at data from the AMA/Institute

for Corporate Productivity High-Performance

Organization Survey 2007 to see how well it

supports the model and to detail approaches that

are correlated with high performance.


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Of course, every organization is unique, and this applies to methods of managing andsustaining high performance. Each of the high-performance companies in our studyuses its own particular blend of approaches, and this is as it should be. Executives inany organization can and should select the approaches most suitable to their particularorganization based on their market situation, their strategy, and their people.

But the composite survey results revealed in this section provide a broad per-spective of the many ways that organizations manage their performance. Just as wecan characterize the composite training methods of high-performance professionalathletes, we can report the results of how the best organizations operate and succeed.And, like professional athletes’ training regimes, the regimens of high-performanceorganizations show us the many ways to gain success. As aspiring athletes can pickand choose from the composite regimen of professional athletes to best fit their sport,body type, and physical abilities, so can executives and managers choose from ourcomposite results for high-performance organizations.

A Model of High-Performance OrganizationsWe have seen in the literature review section of this paper that there is considerablehistory and theory behind the notion of high-performance organizations. From this theory and from close analysis of successful business practice, experts have derived various principles of high performance.

From Weber, for example, come insights about the importance of organizationalstructure and processes. Drucker and Van de Ven point out the need to align behaviorand strategy. Deming highlights the virtues of measuring people, processes and out-comes. From such literature, we have developed a model of performance that centerson five major characteristics of organizations.

The first of these areas is strategic approach. We posit that an organization’sconsistency of strategic approach helps determine its success. This consistency can bemeasured to see how well the organization “walks the talk.” High-performance organi-zations tend to establish clear visions that are supported by flexible and achievablestrategic plans. They also have clearly articulated philosophies that set the standardsfor everyone’s behavior. In addition, they have leaders, managers, and employees whobehave consistently with the strategic plan and the company’s philosophy.

The second major characteristic is tied to customer approach—that is, how acompany treats its customers. High-performance organizations tend to have clearapproaches to obtaining new customers, treating current customers, and retainingcustomers. They also build the necessary infrastructure and processes to support theircustomer approach.

Third is the leadership approach. This describes the organization’s strategy inmanaging people to achieve a particular set of behaviors. High-performance organiza-tions tend to be clear about what behaviors employees must exhibit to execute theorganization’s and departmental strategies. Executives and managers set clear goals,understand employees’ abilities, and guide their performance.

Fourth are processes and structure. This captures how organizations arrangetheir work processes, policies, and procedures to support and execute strategy.

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High-performance organizations have processes that reinforce strategy, setting upwork flows and tasks that most effectively enable employees to meet internal andexternal customer needs within the limits of the strategy. Such companies tend to usea wide variety of metrics to gauge the work for each department and the organizationas a whole.

Fifth are values and beliefs. These are essential to helping a company execute itsstrategy and achieve its mission. High-performance organizations typically have a setof well-established values that are the deep drivers of employee behavior and are wellunderstood by the vast majority of the employees. The values and beliefs are embeddedin the organization and are consistent with the company’s approach to leadership.

An extensive review of the research indicates that these five factors are the majordrivers that influence organizational performance. Each interacts with and influencesthe others, creating a whole system. A change to one creates changes in the others.Subsequently, the system tends to be in continual flux. The interactions among thesefive characteristics are illustrated in the model below.

One way to think about how a system is continually shifting is to picture a sailingvessel. A sailboat is a system made up of various crucial components, among them thehelm (or steering wheel), the rudder, which is controlled by the helm, the boom,which is attached to the sail, the sail itself, and the sheets (or lines) that control theboom. These components must work together as a system or the vessel as a whole willfail. The wind is analogous to changes in the market and these components are likethe five major drivers of organizational performance. If the rudder and the helmbecome disconnected, there will be no steerage. If the sheets become disconnectedfrom the boom or the sail becomes disengaged from the boom, then the vessel can nolonger use the air currents around it. Instead, it becomes a foundering victim to theforces of sea and wind.

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StrategicApproach

CustomerApproach

LeadershipApproach

Processes &Structure

Values & Beliefs

INTERACTIVE COMPONENTS OF HIGH-PERFORMANCE ORGANIZATIONS

From Overholt, Granell, Vicere, Jargon 2006

As any sailor knows, moving as planned through the sea means always account-ing for the direction and the velocity of the wind, the length of the sheets, the cut ofthe sail, the currents in the water, and the angle of the rudder. As the sailor goes forward, he or she is simultaneously adjusting these components to harness the windand accommodate the sea, continually rebalancing the components to maintain anessential harmony among them.

This is the underlying problem and challenge in high-performance organiza-tions. The executives must know how to move their organizations forward while bal-ancing the parts of the system. Executives in high-performance organizations follow thedirection of the wind and water (market changes), using them to their advantage asthey guide their organizations onward.

High Performance in Practice: What the Survey Data Tell UsTo test this high-performance model and identify how high-performance companiesachieve success, the AMA/Institute for Corporate Productivity team conducted a global survey to which 1,369 companies responded. The AMA/Institute for CorporateProductivity High-Performance Organization Survey 2007 analysis then groupedrespondents into three categories, based on their responses to market performancequestions that focused on revenue growth, market share, profitability, and customersatisfaction.

Based on those self-reports, respondents were placed into three categories: lowest performers, mid-level performers, and highest performers. The team thencompared the highest performers to the lowest performers on key attributes withinthe five areas detailed above: strategic approach, customer approach, leadershipapproach, processes and structures, and values and beliefs.

The results reveal which attributes are stronger in high-performance organiza-tions than in less-well-performing organizations. Overall, of the 79 total attributes, 64were found to be positively correlated with high performance. Thus, the results paint acompelling picture of how high-performance organizations achieve their success.

Strategic Approaches: Consistent, Clear and Well Thought OutIn the area of strategic approach, consistency is important to high performance, thesurvey data indicate. The common wisdom of “walk the talk” is an indispensableingredient in high-performance organizations. Most people judge the truth of whatan individual says by matching it to his or her behavior. If an executive, for example,says one must behave consistently with the company’s strategy or philosophy and thenbehaves inconsistently, employees draw a variety of conclusions, most of themdestructive to an organization:

• Do not believe what he or she says.• We are allowed to behave the way the executive does

(or we can pick and choose which rules to follow).• The rules do not apply to everyone (or anyone) and

therefore we are allowed to do whatever we wish.

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Executives in high-performance organizationsavoid these problems by ensuring that employ-ees are clear about the strategic plan and thecompany’s approach to business and by ensur-ing that managers behave consistently. On all12 survey attributes that measure consistencyof strategic approach, the high-performanceorganizations scored higher than the lowerperformers. The survey assessed employees’understanding of the company strategy andphilosophy as well as the degree to whichbehavior is consistent with strategy and philos-ophy. All 12 attributes are positively correlatedto high performance.

Consistency of leadership is only a part of the equation. The AMA/Institute forCorporate Productivity High-PerformanceOrganization Survey 2007 shows that the singlemost widely cited strategic practice amonghigh-performance organizations was, “Myorganization’s philosophy statement is consis-

tent with its strategy.” And the strategic practice in which high performers outstrip lowperformers the most is “Organization-wide performance measures match the organiza-tion’s strategy,” followed by “Organization’s strategic plan is clear and well thought out”(see Appendix, Table 23).

These findings indicate that high performance is not related just to consistencyof leadership behaviors but to its consistency with the overall philosophy of theorganization. Leaders come and go, but philosophy tends to be more stable. Strategiesshould be aligned with these philosophies as well as with performance measures.

Consistency is not enough, however. The great American poet Ralph WaldoEmerson once wrote, “A foolish consistency is the hobgoblin of little minds, adored bylittle statesmen and philosophers and divines.” High-performance organizations mustmake sure that their consistency isn’t “foolish,” which is why ensuring that a strategicplan is “well thought out” is so strongly associated with market success. No companycan perform well if poor leaders devise poorly conceived strategies, even when thosestrategies are consistently implemented.

Customer Approaches: Going Above and BeyondCustomers are crucial to nearly any line of business, but what kind of customerapproaches are most effective to establishing high performance? To find out, theAMA/Institute for Corporate Productivity High-Performance Organization Survey 2007included 12 questions about how respondents view customers, treat customers, andare organized to meet the needs of their customers. The data reveal that all 12 of thecustomer-related questions are positively correlated with high performance.

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HOW DO HIGH-PERFORMANCEORGANIZATIONS

APPROACH STRATEGY?

Most Widely Used Practices

• Organization’s philosophy statement isconsistent with its strategy.

• Respondents know what they need toknow about their organization’s strategyin order to do their jobs effectively.

• The basic theme of the organization’sphilosophy statement matchesrespondents’ personal philosophy.

Practices Where High PerformersFurthest Outstrip Low Performers

• Organization-wide performance measuresmatch the organization’s strategy.

• Organization’s strategic plan is clear andwell thought out.

• Employees act in ways that are consistentwith the behaviors needed to execute thestrategic plan.

Specifically, the results indicate that high-performance organizations tend to be more attuned tothe current and future needs of their customers thanlow-performance organizations. High performance isalso associated with a very strong emphasis on customerservice, including vigorous efforts to serve customersbetter than anyone else in the industry. The survey alsofound high performance is linked with the use of “cus -tomer information as the most important factor relatedto developing new products and services” (see Appendix,Table 25). In short, high-performance companies have—and act on—foresight in regard to their customers.

High-performance firms also understand that differ-ent customers have different needs and that some cus-tomers add more to the bottom line than others. Suchorganizations create different types of processes to managedifferent categories of customers and they are attuned toshifts in the market that require them to change how theytreat customers. In general, they are more outwardlyfocused on customer needs and behavior than low-perfor-mance organizations.

The survey questions and responses in this area can also be grouped into threemajor categories:

1. External focus: In general, high-performance organizations are more willingthan other organizations to hear what is best for the customer rather than what is bestfor the organization.

2. Philosophical approach: High-performance organizations intend to be the“best in the world” in providing value and exceeding customer expectations. These arenot just lofty words or statements, some research shows, but rather actions that are putinto practice. As with strategic approaches, high-performance companies are more likelythan other organizations to “walk their talk” in terms of customer focus.

3. Internal design: High-performance organizations also tend to be better at creating and maintaining internal processes that best meet the needs of the customer.Their customer-focused processes are also more flexible than those in low-performanceorganizations and leave room for employees to use their judgment in meeting customerneeds.

Leadership Approaches: Focused on Performance, Beliefs, and TalentLeadership—especially at the CEO level—is frequently portrayed as the key ingredientin creating a successful organization, but the larger research suggests this can be over-stated. Research conducted by Nitin Nohria and colleagues at Harvard Business Schoolfound, for example, that on average, 14% of a firm’s performance is dependent on itsleader (“Creating,” 2003).

Leadership is only one of five key components of organizational systems that

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APPROACH CUSTOMERS?


• Organization believes that the businessexists primarily to serve customers.

• Organization strives to be the best in the world in providing value for its bestcustomers.

• Organization assesses and determines itscustomers’ future needs.


• Organization uses customer informationas the most important factor fordeveloping new products and services.

• Organization accurately targets itscustomers’ long-term needs.

• Organization exceeds customers’expectations.

must operate in a kind of mutual harmony to be effective. However, in today’s superstar-focused culture, executives and leaders are what most business writers tend to focus onfirst. People are acculturated to emulate the superstar, to be just like him or her.

The AMA/Institute for Corporate Productivity High-Performance OrganizationSurvey 2007 asked participants 11 questions about their organizational approach toleading. The research team found that one of the most widely agreed-on leadership-related strategies is ensuring that “everyone is clear about the organization’s perform-ance expectations.” About two-fifths of respondents either strongly or very strongly agreed that their organizations do this (see Appendix, Table 26), and high-perfor-

mance organizations were considerablymore likely than low-performance organiza-tions to say this. In fact, of the 11 leader-related strategies asked about in the survey,this was the one in which higher performersfurthest outstripped lower performers.

Another important factor associatedwith high performance is “making sureemployees believe that their behavior affectsthe organization.” Leaders can’t do their jobsalone. They must be able to convince othersof just how important their own behaviorsare to the success of the whole organization.

A third factor that was strongly associated with performance was the ideathat “management promotes the person whohas the best skills and knowledge to do thejob.” It appears that performance tends to behigher in organizations where promotionsare based on talent and merit rather than on

other factors, such as organizational politics.The leadership-behavior survey questions can also be analyzed from a broader

perspective that is based on the high-performance paradigm set out above. The questionscan be grouped into three major categories:

1. Supervisory relationship: For over 50 years, organizational researchers have found that the most important relationship within any organization is the onebetween the employee and his immediate supervisor. A good relationship betweenemployee and supervisor is associated with high-performance, more safety-consciousbehavior, better physical health, and higher employee satisfaction. Not surprisingly,the best-performing organizations in the survey scored higher than lower in all thequestions related to this area, including employee comfort with being able to expressdisagreement.

2. Innovation in HR: The survey also found that high-performance organiza-tions had more innovative HR than the low-performance organizations. Their HRfunctions bring new approaches to people management so they are continually aware

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APPROACH LEADERSHIP?


• Immediate supervisor understands thestrengths respondents bring to their jobs.

• Employees believe that their behavioraffects the organization.

• Everyone is clear about the organization’sperformance expectations.


• Everyone is clear about the organization’sperformance expectations.

• Management promotes the person whohas the best skills and knowledge to dothe job.

• Employees believe that their behavioraffects the organization.

of what other companies are doing to more effectively manage people.3. Clarity of goals and consistency of rewards: As noted above, high-performance

companies are clear and consistent in the area of performance expectations, and theyalso tend to be more consistent in the ways they reward workers. They set clear perform-ance expectations, reward employees who have the best ability, and reward thoseemployees who strive to best meet customer needs.

In short, clarity and consistency are important in terms of strategy and philosophy, customer focus, and leadership behaviors. These components mutuallyreinforce each other, strengthening what we can term the “culture of performance” by minimizing the destructive and nonproductive behaviors that are the result ofmixed messages.

Processes and Structure: Centered Around Metrics, Customers, and TrainingSometimes truisms are true, and this seems to be the case with the old adage, “You can’tmanage what you can’t measure.” The AMA/Institute for Corporate Productivity High-Performance Organization Survey 2007 strongly indicates that clearly defined perform-ance measures are a major key to success. Not only was the statement “my organization’sperformance measures are clearly defined” one of the most highly agreed to statementsamong high-performance organizations, but it was the statement in this survey section in

which high-performance organizations outstripped low-performance organizations the most.

The survey found that other especially critical char-acteristics associated with high performance are the fol-lowing:

1. A strong focus on customers2. The kind of training and instruction

that is necessary to do jobs well, and3. Keeping current with state-of-the-

market technological advances. The first of these reinforces previous findings—that

is, there’s a strong relationship between high performanceand customer focus. The second suggests that training andskills play a strong part in high performance. And thethird of these points to the need to stay current with tech-nological advances, which clearly drive performance whenused wisely.

The survey asked 24 questions in this section, twicethe number in the first three sections. The high-perfor-mance organizations were rated higher on most of thosevariables. The processes and structure questions and

responses can be grouped into four major categories to provide a broader perspective.1. Information access: High-performance organizations understand the power

of good communication and of sharing information. Information is viewed as somethingto be shared rather than something to be hoarded for the purpose of power and control.

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HOW DO HIGH-PERFORMANCEORGANIZATIONS APPROACH PROCESSES

AND STRUCTURE?


• Organization’s highest priorities are onmeeting customers’ needs.

• Organization’s delivery schedules forproducts and services are based oncustomer needs.

• Organization’s performance measures are clearly defined.


• Organization’s performance measures are clearly defined.

• Employees receive the training andinstruction necessary to do the jobproperly.

• Organization keeps current with state-of-the-market technological advances.

High-performance organizations’ supervisors share information freely. In addition,information pertinent to the job at hand is made readily available to employees.

2. Technology: Keeping abreast with technological advances is an ongoingstrategic concern. High-performance organizations are more likely to use state-of-the-market technology than other organizations. And since such organizations are morecustomer-focused than others, they also are more likely to use customer-relationshipmanagement software than low-performance companies.

3. Performance measures: As noted above, high-performance organizationsleverage performance measures to drive clarity and focus throughout their organizations.

4. Customer focus: High-performance organizations are more aware of inter-nal and external customer satisfaction than low-performance organizations. Inaddition, high-performance organizations have processes than are more outwardlyfocused than low-performance organizations.

Values and Beliefs: Upbeat, Ethical, and Ready for ChallengesBeing seen as a “good place to work” is a solid indicator that an organization is a highperformer. Not only is the characteristic most widely cited by high-performanceorganizations, it is also one of the areas in which those organizations furthest outstriplow performers.

High-performance organizations are also well aware of external factors such as customers, markets and competitors, and they are ready to take on new challenges.Another factor that’s relatively strongly correlated with performance is a commitmentto innovation (see Appendix, Table 31).

The survey also asked respondentsabout ethics. The research team found thatfully 69% of responding organizations saidthat their organizations adhered to thehighest ethical standards, and the percent-age was higher for top performers. The highpositive response rate reflects the currentconcern over ethical behavior in organiza-tions, and the data indicate a positive rela-tionship between performance and ethics.

The values, beliefs, and ethics surveyquestions can be grouped into four categoriesto provide a broader perspective.

1. Approach to work: In addition tosome of the values noted above, employees inhigh performance companies tend to be loyalto the company and they tend to participate intheir organization’s social events. They alsotend to be more involved and more comfort-able with their companies.

2. How the organization treats its

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APPROACH VALUES AND BELIEFS?


• Most employees think the organization isa good place to work.

• The organization’s organizational culture isexternally focused on customers, markets,and competitors.

• The organization emphasizes readiness tomeet new challenges.


• The organization emphasizes a readinessto meet new challenges.

• A shared value that keeps theorganization together is commitment toinnovation.

• Most employees think the organization isa good place to work.

employees: High-performance organizations create an environment that fosters cohe-siveness, loyalty, and readiness to change. Such organizations tend to treat theiremployees well, and employees, in turn, treat the organization well. These organiza-tions also tend to be more concerned about their employees than the low-performanceorganizations, and they tend to have employees who are able to find helpful, knowledge-able opinions among their coworkers.

3. Employees have the freedom to use their judgment: In high-performanceorganizations, employees have more freedom to use their own discretion thanemployees do in low-performance organizations. Employees in these organizationsalso have more liberty to change processes or procedures to improve outcomes. Their supervisors have the same type of freedom. All of these changes are madewithin a more cohesive group than in low-performance organizations. The feedbackloops minimize disruption and reduce confusion.

4. Ethics: As noted before, high-performance organizations tend to have astronger set of ethics-related values than the low-performance organizations.

The Context for High-Performance OrganizationsBusiness leaders should keep in mind that, despite the fact that high-performance companies tend to share many characteristics, there are many different strategicapproaches to the marketplace. This was supported by the results of the AMA/Institutefor Corporate Productivity High-Performance Organization Survey 2007, which askedrespondents to indicate what market strategies they were pursuing. (The questionused a modified Treacy and Wiersema [1995] model.)

Specifically, the questions identified four major market strategies: (1) competingon low price, (2) competing by offering a set of products and/or services, (3) competingby branding, and (4) competing by offering unique solutions. In essence, the researchteam asked respondents what their companies’ value propositions were. The data indi-cate that many companies pursue multiple value propositions. The research team’s con-clusion from this finding is that companies in today’s highly competitive, globalizedmarkets need to be prepared to pursue multiple strategies as they adjust to different

markets.Nonetheless, the survey does suggest that some

value propositions are more likely than others to lead tohigh performance. Although it’s true that some of theworld’s most successful companies compete by offeringlow-priced products and services, this survey indicates thatoffering “distinctive branded products and services” and“products and services that are customized for specificcustomers” was more strongly associated with good mar-ket performance. It’s possible that, in a highly competi-tive global marketplace, maintaining a position as a low-cost provider is increasingly difficult to achieve whilemaintaining the kind of margins associated with highperformance. The value proposition that shows the

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HOW DID RESPONDING COMPANIESAPPROACH THEIR

VALUE PROPOSITIONS?*• Distinctive branded products or services—

84%

• Products or services that are customizedfor specific customers—79%

• Lower-price products or services withdesirable extra features—31%

• Lowest-price products and services—20%

*Percentages derived from percentage of companiesnoting somewhat, strongly or very strongly agree.Multiple responses were accepted.

largest gap between higher and lower performers was “distinctive branded products orservices” (see Appendix, Table 13).

Summary of ResultsAs this section of the report has shown, there is no single secret to high performance.Rather, successful organizations are dynamic systems with interdependent parts.However, as the AMA/Institute for Corporate Productivity team reviewed anddigested the results of the AMA/HRI High-Performance Organizations Survey 2007, we developed a short list of characteristics of high-performance organizations:

1. They “walk the talk,” behaving consistently throughout the organization.2. They understand their customers to a very high degree, knowing what

customers need and focusing on meeting those needs.3. They manage locally and yet share information; they develop and support

great supervisors and provide access to as much information as employeescan use.

4. They create an environment of focus and teamwork; they do this by designingprocedures and processes to pull everyone together and by clearly measuringoutcomes.

5. They treat employees well so that employees will treat the organization well;they clarify values and expectations and they behave with the highest ethicalstandards.

Organizations that share these characteristics are not guaranteed to be high per-formers, but they stand a considerably better chance of performing well than if theyfail to adopt these traits.

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High Performance in the Year 2017

In this section, we describe a fictional corporation

that we’ve called the High-Performance

Organization Company, or HIPOC. We do this

in order to illustrate what we believe will be the

future characteristics of high-performance

organizations.


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This interview is set in the year 2017 and incorporates ideas from the AMA/Institute forCorporate Productivity team as well as from the High-Performance Organization Survey 2007.

Of course, we can’t be sure what future state-of-the-art execution programs willlook like, so these are only educated guesses about what approaches will work best in 10 years. Moreover, circumstances vary by company and industry, so not every feature of the organization’s program will be applicable in every company.

Nonetheless, these kinds of exercises can help managers look beyond the dailyoperational details of managing their organizations. The AMA/Institute for CorporateProductivity research team encourages managers to engage in various strategic planningmethods—such as scenario planning—to help them gain a better understanding of how their organizational performance programs could or should evolve.

Interview with Sara Ohmet, CEO of HIPOC

Proactive, Analytical, and Values-DrivenReporter: We are speaking with Sara Ohmet, Chief Executive Officer at HIPOC.

Sara, HIPOC has gone through an unusually long period in which it has outperformedthe overall marketplace and direct competitors in its industry. Everyone would like toknow what your secret is, especially considering all the changes that have occurred in the marketplace over the last decade.

Ohmet: I’d say we haven’t succeeded despite all those changes but because we’ve successfully adapted to those changes.

Reporter: How so?Ohmet: We’ve long emphasized looking outside the corporation. Too often,

organizations become inward-looking, but part of our culture is to focus a good deal of our attention on external customers, markets, and competitors. This means we aren’t surprised too often. We also stay abreast of the many other external factorsthat influence organizational performance.

Reporter: Can you give us an example?Ohmet: The talent in today’s labor force is a good example. Some of our businesses

require very specific skill sets, so we’ve become highly adept at determining where we canlocate such talent externally. We’ve developed strong professional networks that we man-age and track via information systems. We even collect data from universities and othereducational institutions from all over the world to try to gauge where the top talent islocated. In a growing number of cases, we contract with specialists we meet through Web-based and virtual-world-based communities.

We’ve found that the virtual world spaces make it especially easy to do this. Insome cases, we’ve been contracting multiperson avatars, in which several consultantsshare an online body so that they can pool their expertise even while interacting with us as a single, super-knowledgeable entity.

Reporter: I guess that adds a whole other meaning to “diverse workers.” Can youhire as well as contract with these super employees?

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Ohmet: Well, you’d actually be hiring an existing team of people, of course, whichwe’ve sometimes done in the past. In a lot of cases, we hire people who we’ve workedwith as contractors. In fact, we encourage our up-and-coming talent to work outsideHIPOC for a while to gain a truly different perspective. This helps us maintain thatexternal focus.

Reporter: What other ways does HIPOC focus outwardly?Ohmet: We understand that the world is a very innovative place and that much

of what we’ll need in the future has not been invented inside HIPOC. Therefore, wehave systems and processes to keep track of up-and-coming technologies. One of thequickest ways to lose your competitive advantage is to ignore technological advances.We have employees and networked systems dedicated to tracking new developmentsand working to see how we might harness those technical advances.

But that doesn’t mean that we jump on every bandwagon. Too often, companiesadapt a technology just because it seems fashionable. In addition to using our standardR&D processes and partnerships, we audition up-and-coming technologies throughwhat we call “quick trials”—in which a team quickly tries to apply a new technologyto specific problems we’re having.

Reporter: Some of your businesses are highly regulated. How do you deal withthat issue?

Ohmet: Again, we try to stay proactive and aware of what’s coming down thepike. We’ve been known to lobby against proposed new laws that we consider onerous,but that’s unusual for us. We generally try to stay ahead of laws and regulations thatwe see as inevitable. For example, our manufacturing operations tend to be “greener”than the law actually requires, and we’re much more safety and health conscious thangovernment regulations actually require.

Reporter: Your company seems to place a lot of emphasis on the concept ofhealth, doesn’t it?

Ohmet: Yes, we’re not just concerned with individual health but with organiza-tional health. Our executive team refers to what we call the “quadruple bottom line.”This is an extension of the triple bottom line concept, which looks at the financial,social and environmental bottom lines of organizations. The fourth bottom line, in ourestimation, is how well we function as a system. That is, we rigorously measure howwell our different organizational components align with and work with one another.

We’ve even found a correlation between individual and organizational health. Thatis, the better run we are, the healthier our employees seem to be. We have systems in placethat, in aggregate, try to measure the impact of organizational behavior on employees’state of wellness. The underlying driver is based both on our organizational values and onresearch showing that productivity can be increased by boosting the wellness of employ-ees. It’s the right thing to do from both an ethical and analytical viewpoint.

Reporter: Measuring the impact of organizational behavior on individual well-being sounds very complex and possibly legally risky. For example, a person’s well-beingis influenced by all kinds of factors, from genetics to upbringing to home life to individual

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choices. Do you really want your organization to be held legally responsible for workers’well-being?

Ohmet: Those are good points. Ultimately, of course, we don’t claim to haveperfect knowledge about people’s health or what’s influencing it. We’re looking more ataggregate data of the sort that can help us improve the well-being of organizationalmembers. We are using the data to work on preventive health issues. So far, our legalcounsel hasn’t seen much risk in this for us, especially because our policies in this area areso progressive when compared to what’s required by law.

Reporter: So, it sounds as if your organization derives large performance dividendsfrom being unusually analytical, proactive, alert to changes, and focused on the healthof your workers as well as your organization as a whole.

Ohmet: Those are definitely a part of the story.

Clear, Consistent, and Customer-FocusedReporter: So what are the primary drivers of performance, in your opinion?Ohmet: I’d say most of it comes down to what we call the internal three Cs:

clarity, consistency, and customers. We have to be clear about what we’re trying toachieve and how, consistent in how we present those messages, and always focused on needs of customers. There’s nothing new in any of this. Rather, it’s the way that weachieve those goals that continues to evolve.

Reporter: Okay, so how have your approaches to customers, for example,changed over the last 10 years?

Ohmet: Customers themselves have changed. They expect more, have more infor-mation, and have more choices. They’re also a lot more demographically diverse thanthey used to be, thanks to globalization.

All this changes the way we approach customers. We have to react faster to theirneeds than we used to, be flexible enough to accommodate their more varied needs,and be able to sell our products as socially and environmentally responsible. We involvecustomers more in the innovation process, allow them to customize more, and have amore integrated and a more responsive customer-service system.

We also interact with them on very different terms than we used to. Technologymediates the customer relationship more than it used to but we still have to maintaina personal touch. It’s a difficult challenge and we’re always thinking about how to do it better.

Reporter: And how about clarity?Ohmet: Clarity is about two things: Excellent strategy formulation and communi-

cation. Too often, managers think it’s all about communicating something clearly. Butthat’s only a part of it. If you have a murky, messy strategy, you’re never going to beable to make it clear, no matter how persistent you are. So our approach to clarity hasevolved over the last 10 years because there are new ways of formulating strategies, newstrategic approaches and new ways of communicating those strategies.

Reporter: Can you give an example of what you mean?Ohmet: We are in businesses today that we weren’t even thinking about 10 years

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ago. For example, we now make products for kids, largely because they became savvyusers of a modified high-tech product that was once reserved for adults.

Going after that market was a strategic decision that didn’t make much sense tosome of our adult-oriented employees at first. Leadership had to be clear about whatwe were doing and why. And we had to be clear in our own minds about why this newdirection made sense.

Reporter: Well, it’s certainly paid off for you. How could employees fail to seethe potential?

Ohmet: That market was an unknown to them. We had to make sure peopleunder stood how the strategy fit in with our mission, philosophy, and way of working. So we communicated, clearly and often, in many different styles but always with a certainconsistency.

Reporter: So your customer base evolved but your philosophy stayed the same.Ohmet: Our philosophy actually assumes a great deal of flexibility toward products

and customers. Today’s organizations have to reinvent themselves to be able to react towhat customers specifically want rather than to what organizations want to push out tothem. So, our philosophy has to be flexible even while it maintains a consistency.

Well Led and ResilientReporter: As you’ve become more global and have moved into other businesses,

how have you maintained your culture and values?Ohmet: I think there are two answers. First, we needed terrific leadership.

Second, those leaders need to be very canny about processes and structure. Let’s start with how leadership has changed. Today’s leaders have got to be

extremely network savvy compared to 10 or 20 years ago, and they have to be able tomotivate a much different workforce. They also must have plenty of global experience.In our organization, many originally hail from nations outside the U.S. We even haveanthropologists involved in our leadership programs to help us understand and adjustto cultural differences. We also have a very sophisticated global recruitment and management database.

We work hard on managing all the different views that a multilingual and multi-cultural workforce generates. Our leaders must be excellent at managing conflict, atrunning the kinds of virtual meetings that surface good ideas and at gaining everyone’sbuy-in. And they must know when an issue needs to be handled locally or when it needsto be coordinated on a regional or global basis.

Moreover, these leaders have to be excellent at creating organizational processesand structures that are flexible but not chaotic, adaptive but not unstable. In recentyears, many organizations have lost their core. They’re little more than names on acontract. They’re constantly hiring new leaders and entering entirely new businesses.They merge, acquire, partner and network with abandon. But they’re virtually neverseen as great performers.

HIPOC, on the other hand, is intent on maintaining certain communication

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processes and organizational structures that give us stability and yet resiliency overtime. Sometimes we joke that we’re like the proverbial yogi who can twist himself inall kind of different shapes and yet maintain a healthy backbone. We’re most flexibleat the extremities, in the ways we interact with and serve our customers.

Involved with the CommunityReporter: Some experts argue that the boundaries between companies and com-

munities aren’t as separate as they once were, thanks to the success of the responsibilitymovement over the last decade. What’s HIPOC’s take on these blurring boundaries?

Ohmet: Some of that is true for us as well. We link our internal three Cs—clarity,consistency, and customers—with what we call the external three Cs: coordination, collaboration, and community. We coordinate with the community representatives whendeveloping certain business plans, such as those involving building, waste management,environmental restoration, energy sharing, and the like. We collaborate during the implementation of those plans and keep in mind that we are, in fact, part of the largercommunity.

Of course, like many other corporations these days, we gauge ourselves by usinga social responsibility index. Our scores clearly affect our stock price, and, therefore,we take it very seriously.

We also have metrics that identify the quality of life in every location we are in.These metrics help us assess the health of the community via data on the state of theeducation system, crime rates, the quality of governmental services, poverty rates, andmany other social issues. Our premise is that there’s a positive feedback loop betweencommunity health and our own corporate performance, and the data usually bearsthis out.

This is why our plants and operations don’t move around as much as they usedto. Rather than downsizing and then shipping operations overseas, we usually justexpand into new regions. The temptation to move abroad for the sake of low-costlabor—which we’ve done before—isn’t as strong now that there’s more global equityin this area.

High Tech and High TouchReporter: I’ve heard you refer to HIPOC as a high-touch organization, which

is odd considering you’re a leader in various high-tech areas.Ohmet: We know the limitations of high-tech. Don’t get me wrong. High-tech

communication is terrific and sometimes nearly miraculous. We use it all: team-basedsurface computing, telepresence suites, holographic integration apps, massively multi-player environments, and more. It’s all wonderfully useful for a global corporation likeours, yet it can still feel distant and cold sometimes.

Ultimately we’re still people. We need some face-to-face interactions with colleagues, especially when developing new products or solving difficult problems.There’s just nothing like smart people together in the same room, batting aroundideas, sharing passions, establishing friendships. So, we make sure that they have

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plenty of opportunities to work together. We have lots of satellite offices, volunteergroups, brainstorming meetings, retreats, and the like.

We also encourage people to work with and within their local communities.Small, personally connected groups can make a huge difference to improving neigh-borhoods. Technology goes a long way toward mediating connections, but there’snothing like a neighborhood porch party for really getting to know folks.

All these high-touch initiatives become part of the culture. We want HIPOC tobe a great place and a safe place to work, both physically and emotionally. Ouremployees then share this reality with our customers and the larger community.

Reporter: Do you apply the high-touch philosophy to customer relations?Ohmet: We can’t possibly meet all our customers on a personal basis, of course,

but we do hold events where we meet with them personally. We could sell all of ourproducts and even many of our services online, but we don’t limit ourselves to onlineselling. We rent space in various retailers and have our own stores in major metropolitanareas, all in the name of connecting with our customers better.

We want to know what they’re thinking, how they’re using products, how stronglythey feel about our products. And we want to share our own passion with them. Havinga passion for the beauty and design of our products is important to us.

Reporter: Are there any downsides to forging personal relationships with customers?

Ohmet: Well, one might be that you raise expectations. Employees, as individuals,are not available 24/7, yet customers expect HIPOC to be available 24/7. So we’ve developedteaming relationships that connect the customer with a team of our employees.

Reporter: But how does this make a customer feel a connection? Isn’t this justan organization providing service through multiple faces?

Ohmet: Of course, we have information systems that tell us vast amounts aboutour customers. There’s nothing new about that in terms of being able to pull up dataabout buying habits, credit reports, previous purchases, and other things. But we’vegone the extra mile by giving them opportunities to voluntarily tell us things aboutthemselves, things that they don’t mind are in our computer systems: favorite colors,hobbies, sports teams, musical tastes, and so forth.

This helps us understand them a bit as individuals even if we don’t know thempersonally. And employees are trained in how to use this information in a way thatisn’t off-putting to customers. Most customers enjoy this process. The whole socialnetworking phenomenon of 10 years ago has now grown into connective software,software that the customers themselves have helped write.

Transparent, Healthy, and Professionally ManagedReporter: Any danger that your organization is becoming a bit too touchy feely

for today’s super competitive marketplace?Ohmet: That’s a mistake our competitors sometimes make, thinking that we

aren’t as tough as nails when it comes down to the financial fundamentals. One thingwe’re great at is sharing financial data with everyone in the company and giving every-

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one a stake in our success via stock options, profit sharing, and so forth. Transparencyis one of our highest values.

We all know when our bottom line is starting to suffer, which makes course corrections a lot easier. We also rigorously analyze the work environment, looking atindividual, team and business unit performance. And we have systems in place tomake sure we’re listening to everyone’s ideas about how to improve the business.

Reporter: Do you see everyone as a potential leader?Ohmet: That’s a tricky question. Everyone can show leadership behaviors at

times, but we view management itself as a serious discipline and profession, as we doany other technical profession, such as engineering, toxicology, or chemistry. Oursupervisors may have technical skills but they’re also management professionals andwe treat them that way. They’re well trained and are expected to grow and to continu-ously improve. Not everyone can be or wants to be a manager.

Reporter: You said you analyze team behavior as well. How does that work?Ohmet: We have developed internal taxonomies that identify healthy and

unhealthy units, departments, and locations. We have linked the typologies to our performance outcome measures. Consequently, every supervisor, manager, and execu tive has a complete picture—a moving picture, if you will—of how healthy their area is and what can be done to improve it.

These pictures are based on integrated metrics that enable us to drill up or downin the organization, looking at how the organization behaves and helping us identifyinterventions that will improve our performance.

Reporter: How do you define healthy?Ohmet: In HIPOC, healthy means that employees feel safe physically and

emotionally, meet and exceed performance targets and work collaboratively withinternal and external customers. We also look at how strongly connected our employeesare to HIPOC on a personal level, understanding that some people need more connectionto their place of work than others.

And health means maintaining ethical operations and living by our values. Forexample, with all the personal information we have on our employees, our customersand our partners, there’s the potential for misuse of information. Ethics is a must inthis environment.

I’d say our values and ethics have remained stable over the years even as our businesses have shifted, our technologies have become more powerful, we’ve moved intoother regions and industries, and we’ve run into new ethical questions. It’s good to have a values bedrock on which you can make decisions. Some things shouldn’t change.

34


35

Conclusion

This study shows that achieving high levels of

organizational performance is a multidimensional

process.


35

36

It’s important for a company’s values and philosophy to align with its strategies, whichthen must align with performance metrics and leadership approaches. Organizationalalignment is important but so is excellent execution. Strategies, for example, must bewell thought out, and the organization should strive to exceed customer expectations.

The study also suggests that, over the next 10 years, these characteristics of high-performance organizations are likely to remain stable but the ways in whichcompanies demonstrate those characteristics will evolve. For example, there will bechanges in leadership competencies, talent-management programs, technology usage,customer service, performance metrics, and the like. Achieving and maintaining highperformance will require companies to adapt to a changing marketplace and shiftingsocial attitudes.

Organizational leaders will also need to adapt to new theories and understandingsof high performance, staying abreast of the research in the field. After all, today’s favoredstrategies and best practices can easily become tomorrow’s failures of imagination. Amidthese changes in practices and marketplaces, there will companies that are especiallyoutstanding in terms of their ability to perform at a high level for years at a time. Theseorganizations will always be worth studying because they have much to teach us.

36


37

Epilogue

This study shows that companies are high-performance organizations because of theeffectiveness and efficiency of their leadership and management of operations. As youhave read in this study, there are a number of factors that specifically influence corporateperformance—talent management, globalization, authenticity, technology, and thelike—and the importance of strategy, customer focus, processes, and values to corporateperformance. It identifies specific actions you can implement to ensure your business willbe a high-performance organization, pointing up the importance of a multidimensionalapproach.

Alignment of values and mission and then alignment of these with performancemetrics and leadership approach is critical to success as an organization. Each of theseareas also has key practices that must be followed—from clear and well thought outstrategies to an organizational culture that is externally focused on customers,markets, and competitors, to clarity about performance expectations.

Thus our study should give you the start of a to-do list to examine yourorganization’s well being and start you on the way to building and sustaining a high-growth company.

We need only to look at companies that are complacent and therefore notperforming to their potential to recognize how important it is to know what makes ahigh-performance organization. Only then can we begin the building process.

AMA has made a commitment to continue to develop timely, relevant learningopportunities that will support your effort. We recognize that creating a high-performance organization in the twenty-first century will demand your organizationunlearn and bury some old habits of the twentieth century. We can help you do this.

Edward T. ReillyPresident and Chief Executive Officer

American Management Association


37

38

Appendix

About This Survey

Target Survey PopulationThe target survey population of the AMA/Institute for Corporate Productivity High-Performance Organization Survey consisted of the Institute for Corporate Productivitye-mail list of primarily high-level human resource professionals; AMA’s internationale-mail list of supervisors, managers and executives across a wide range of functions;and HR.com’s list of members. In total, 1,369 usable surveys were submitted. Mostorganizations were either global (34%) or multinational (26%), while the rest werenational.

Survey Instrument In this survey, multiple questions used the well-accepted Likert-type scale, with a 1 rating generally designated as “very strongly disagree” and a 7 rating designated as“very strongly agree.” Market-performance questions used a 1-to-5 scale so the datawould remain comparable with previous AMA/HRI surveys. There were 23 questionsin all, 11 geared toward the demographics of respondents. Some questions hadmultiple parts.

ProcedureA link to an online survey was e-mailed to the target population by region duringApril and May 2007.

38


39


Table 1

In what function do you currently work?

Finance 6.27%

General management 16.89

HR 33.93

Administrative 4.34

Marketing 6.35

Operations 7.67

Research and development 4.73

Sales 4.26

Systems/IT 3.41

Other 12.15

Table 2

What is your current title?

CEO/President/Chairman 5.73%

EVP/SVP 2.79

Vice President 7.13

Director 23.55

Manager 34.70

Supervisor 3.64

Other 22.46

Table 3

What is your level of responsibility?

Corporate 42.68%

Division 19.05

Region 13.32

Plant 6.27

Office 18.68

Demographic Questions and Results

40


Table 4

What is your gender?

Male 53.14%

Female 46.86

Table 5

What is your age?

24 or younger 1.63%

25-30 6.66

31-35 12.16

36-40 15.26

41-45 20.91

46-50 16.65

51-55 14.95

56-60 8.83

61-65 2.56

66-plus 0.39

Table 6

What is the size of your organization’s entire workforce in the world?

Under 100 employees 17.58%

100-499 18.05

500-999 8.06

1,000-3,499 13.17

3,500-4,999 5.27

5,000-9,999 7.98

10,000 or more 29.89

41


Table 7

What is the total revenue (in USD) of your entire worldwide organization?

Less than $50 million 27.67%

$50-$249 million 13.95

$250-$499 million 8.45

$500-$999 million 7.91

$1 B to $2.99 B 11.40

$3 B to $9.99 B 11.94

Over $10 B 18.68

Table 8

Please identify your organization by type of operation:

Global (high level of global integration) 33.59%

Multinational (national/regional operations act independently) 26.22

National (operations in one country only) 40.19

42


Table 9

In which overall region are you located?

Canada 9.46%

U.S. 14.69

Mexico 4.53

United Kingdom 6.36

France 4.83

Germany 5.13

Other Western Europe 5.92

Eastern Europe 4.90

Scandinavia 3.32

China 5.13

India 4.22

Japan 4.17

Korea 2.79

Other Asia 5.02

Central America 3.06

South America 4.51

Caribbean 2.10

Africa 3.54

Oceania 2.40

Middle East 3.92

43


Performance Questions and Results

About These CategoriesA variable labeled performance was created from the average of the four performancequestions shown below. A tertiary split was then done on performance, creating high,middle, and low groups. The Higher Performers are the high group, and the LowerPerformers are the low group. Data from these two groups were incorporated intomany of the tables in this appendix.

In addition, Pearson correlations were calculated between the variableperformance and each of the individual practices. Relationships that are statisticallysignificant at the .01 level (two-tailed) are noted and the rest are marked as notsignificant.

A gap analysis was also done that compared the differences in responses betweenthe Higher Performers and the Lower Performers. Positive values indicate that HigherPerformers engage in a specific practice more so than Lower Performers. Negativevalues indicate the opposite. The greater the absolute value, the greater the differencesbetween Higher and Lower Performers.

Responses

On a scale from 1-5, how would you rate the following compared to the last five years?*

Your revenue growth 3.81 4.78 2.75

Your market share 3.66 4.50 2.75

Your profitability 3.68 4.59 2.62

Your customer satisfaction 3.69 4.30 3.07

Overall market performance 3.71 4.54 2.80

HighPerformersOverall

LowPerformers

Table 10

*Responses to these questions are based on a 5-point scale, with 1 = “at an all-time low level” and 5 = “at an all-time high level.”

44


Responses

How do the following performance indicators compare to the last five years?

At an all-time low level 2.00% 1.17% 1.83% 0.58%

Significantly worse 8.26 8.42 10.01 5.01

About the same 18.68 26.61 21.77 30.05

Significantly better 48.54 50.38 51.04 53.26

At an all-time high level 22.52 13.42 15.35 11.10

Market Share

Revenue Growth Profitability

Customer Satisfaction

Table 11

Table 12

Responses

How does your organization create its value proposition?

VeryStronglyDisagree

VeryStronglyAgree

StronglyDisagree

SomewhatDisagree

Sometimes Agree andSometimesDisagree

SomewhatAgree

StronglyAgree

Lowest prices 21.45% 25.77% 16.35% 16.23% 10.10% 6.92% 3.18%

Low prices with desirable features 14.67 22.80 14.67 17.27 15.80 11.29 3.50

Distinctive branding 1.17 2.23 3.18 9.87 19.11 41.72 22.72

Customization 2.11 3.37 4.11 11.58 18.42 34.32 26.11

Value Proposition Questions and Results

45


* Scores based on 7-point Likert Scale. ** Pearson correlations were calculated between the variable performance for all respondents and

each of the individual practices. Relationships that are statistically significant at the .01 level (two-tailed) are noted and the rest are marked as not significant.

*** Differences between Higher-Performer and Lower-Performer scores.

Table 13

Responses

On a scale from 1-7, how strongly do you agree or disagree that your organization’s value proposition is created by offering the following?

All Respondents*

Higher Performers*

Lower Performers*

Correlation Between

Performance and Practice**

DifferenceBetween HP and LP

Scores***

Lowest price products or services 3.01 2.91 3.08 n.s. -0.17

Lower price products or services with desirable extra features 3.45 3.37 3.51 n.s. -0.14

Distinctive branded products or services 5.60 5.81 5.32 0.16 0.49

Products or services that are customized for specific customers 5.48 5.61 5.22 0.13 0.39

Table 14

Responses

Which of your customers’ needs are your products designed to meet?


VeryStronglyAgree

StronglyDisagree

SomewhatDisagree


SomewhatAgree

StronglyAgree

Immediate needs 0.82% 1.53% 3.06% 7.65% 18.47% 39.39% 29.08%

Short-term needs 1.03 2.57 3.80 9.55 23.51 37.89 21.66

Long-term needs 0.62 0.21 2.77 6.57 14.99 40.76 34.09

Future needs 0.83 1.24 4.97 10.67 18.65 33.89 29.74

Product Questions and Results

46


Table 15

Responses

On a scale from 1-7, how strongly do you agree or disagree that your organization’s products are designed to meet your customers’ following needs?

All Respondents

Higher Performers

Lower Performers

Correlation Between

Performance and Practice


Scores

External customers’ immediate needs 5.76 5.92 5.52 0.13 0.40

External customers’ short-term needs 5.52 5.58 5.40 n.s. 0.18

External customers’ long-term needs 5.94 6.14 5.68 0.19 0.46

External customers’ future needs 5.66 5.93 5.36 0.19 0.57

Table 16

Responses

Does your organization’s management expect employees to be good at the following?


VeryStronglyAgree

StronglyDisagree

SomewhatDisagree


SomewhatAgree

StronglyAgree

Efficiency 0.30% 0.71% 1.83% 4.97% 15.01% 45.03% 32.15%

Quickly adapting to make different products or deliver different services 0.51 1.53 2.86 6.33 18.28 40.96 29.52

Understanding how to make many different types of products or deliver many different types of services 0.93 2.37 6.09 12.18 22.19 34.37 21.88

Using their skills, knowledge and experience to create unique solutions for customers 0.92 1.94 3.17 6.13 13.60 36.40 37.83

Management Questions and Results

47


Table 17

Responses

On a scale from 1-7, how strongly do you agree or disagree that your organization’s management expects employees to be good at the following?

All Respondents

Higher Performers

Lower Performers

Correlation Between



Scores

Efficiency 5.97 6.19 5.75 0.17 0.44

Quickly adapting to make different products or deliver different services 5.81 6.02 5.56 0.17 0.46

Understanding how to make many different types of products or deliver many different types of services 5.43 5.60 5.12 0.15 0.48

Using their skills, knowledge and experience to create unique solutions for customers 5.90 6.27 5.47 0.27 0.80

Table 18

Responses

Are your organization’s processes primarily designed to create the following?


VeryStronglyAgree

StronglyDisagree

SomewhatDisagree


SomewhatAgree

StronglyAgree

Efficiency 0.92% 3.47% 5.30% 11.72% 24.57% 32.62% 21.41%

Effectiveness 0.41 1.63 3.46 9.05 21.06 38.35 26.04

Flexibility 1.84 3.57 7.24 16.53 26.02 27.55 17.24

Uniqueness 1.55 4.44 9.70 16.41 24.97 25.28 17.65

Process Questions and Results

48


Table 19

Responses

On a scale from 1-7, how strongly do you agree or disagree that your organization’s processes are primarily designed to create the following?

All Respondents

Higher Performers

Lower Performers

Correlation Between



Scores

Efficiency 5.39 5.73 4.92 0.26 0.81

Effectiveness 5.68 5.99 5.24 0.27 0.75

Flexibility 5.13 5.56 4.61 0.28 0.96

Uniqueness 5.05 5.38 4.68 0.20 0.71

Table 20

Responses

Which type of employees best fit your organization’s culture?


VeryStronglyAgree

StronglyDisagree

SomewhatDisagree


SomewhatAgree

StronglyAgree

Logical thinkers 0.41% 1.12% 3.86% 11.27% 24.47% 39.49% 19.39%

Intuitive thinkers 0.61 2.13 6.81 14.84 27.03 30.39 18.19

Steady workers 0.20 2.03 3.24 10.23 25.53 40.73 18.03

Rapid workers 0.61 1.94 6.12 17.14 28.06 31.63 14.49

Employee Questions and Results

49


Table 21

Responses

On a scale from 1-7, how strongly do you agree or disagree that the following types of employees fit your organization’s culture?

All Respondents

Higher Performers

Lower Performers

Correlation Between



Scores

Logical thinkers 5.54 5.80 5.29 0.18 0.50

Intuitive thinkers 5.29 5.58 5.00 0.19 0.58

Steady workers 5.53 5.67 5.43 0.09 0.24

Rapid workers 5.23 5.44 5.08 0.10 0.36

Table 22

Responses

How strongly do you agree or disagree with the following statements regarding your organization’s strategy?


VeryStronglyAgree

StronglyDisagree

SomewhatDisagree


SomewhatAgree

StronglyAgree

My organization’s philosophy statement is consistent with its strategy. 1.20% 2.61% 4.47% 9.91% 20.92% 39.11% 21.79%

My organization’s strategic plan is clear and well thought out. 1.95 3.79 6.93 12.13 25.79 34.02 15.38

My organization’s philosophy statement is frequently discussed. 2.74 8.87 13.03 15.88 26.94 22.56 9.97

Strategy Questions and Results

50


Table 22 (continued)

Responses

How strongly do you agree or disagree with the following statements regarding your organization’s strategy?


VeryStronglyAgree

StronglyDisagree

SomewhatDisagree


SomewhatAgree

StronglyAgree

The basic theme of my organization’s philosophy statement matches my personal philosophy. 1.41 2.50 4.23 13.36 23.13 37.02 18.35

I know what I need to know about my organization’s strategy in order to do my job effectively. 1.30 2.27 5.83 7.99 21.81 36.93 23.87

The behavior of my organization’s executive management team is consistent with the organization’s philosophy as I understand it. 2.49 4.44 6.18 15.06 21.78 34.67 15.38

The behavior of my organization’s middle managers is consistent with the organization’s philosophy. 1.63 2.51 7.95 18.30 33.33 28.87 7.41

The behavior of my organization’s executives is consistent with the behaviors needed to successfully execute the strategic plan. 2.28 4.34 5.86 15.94 23.43 36.01 12.15

The behavior of my organization’s middle managers is consistent with the behaviors needed to successfully execute the strategic plan. 1.31 3.38 7.30 19.06 35.29 27.02 6.64

My organization-wide performance measures match the organization’s strategy. 1.96 3.04 7.17 16.63 26.74 34.78 9.67

The behavior of my organization’s employees is consistent with the organization’s philosophy. 0.87 3.69 6.62 20.93 34.16 26.36 7.38

The behavior of my organization’s employees is consistent with the behaviors needed to successfully execute the strategic plan. 1.19 3.79 6.60 21.00 34.52 26.19 6.71

51


Table 23

On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s strategy?

My organization’s philosophy statement is consistent with its strategy. 5.51 5.89 5.02 0.27 0.87

My organization’s strategic plan is clear and well thought out. 5.20 5.64 4.61 0.32 1.02

My organization’s philosophy statement is frequently discussed. 4.63 4.93 4.22 0.21 0.70

The basic theme of my organization’s philosophy statement matches my personal philosophy. 5.39 5.69 5.02 0.23 0.66

I know what I need to know about my organization’s strategy in order to do my job effectively. 5.53 5.80 5.08 0.23 0.73

The behavior of my organization’s executive management team is consistent with the organization’s philosophy as I understand it. 5.15 5.53 4.60 0.25 0.93

The behavior of my organization’s middle managers is consistent with the organization’s philosophy. 4.95 5.29 4.48 0.25 0.80

ResponsesAll

RespondentsHigher

PerformersLower

Performers

Correlation Between



Scores

52



On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s strategy?

The behavior of my organization’s executives is consistent with the behaviors needed to successfully execute the strategic plan. 5.11 5.50 4.61 0.25 0.89

The behavior of my organization’s middle managers is consistent with the behaviors needed to successfully execute the strategic plan. 4.91 5.29 4.43 0.26 0.86

My organization-wide performance measures match the organization’s strategy. 5.06 5.50 4.47 0.29 1.04

The behavior of my organization’s employees is consistent with the organization’s philosophy. 4.92 5.28 4.43 0.27 0.85

The behavior of my organization’s employees is consistent with the behaviors needed to successfully execute the strategic plan. 4.89 5.31 4.37 0.29 0.94

ResponsesAll

RespondentsHigher

PerformersLower

Performers

Correlation Between



Scores

53


Table 24

Responses

What is your organization’s strategy regarding customers?


VeryStronglyAgree

StronglyDisagree

SomewhatDisagree


SomewhatAgree

StronglyAgree

We assess and determine our customers’ future needs. 0.34% 1.68% 4.94% 10.33% 30.30% 37.37% 15.04%

We believe that the business exists primarily to serve customers. 0.00 0.34 3.02 6.49 14.65 39.37 36.13

We strive to be the best in the world in providing value for our best customers. 0.23 1.92 3.16 6.09 16.91 38.22 33.48

We exceed our customers’ expectations. 0.67 2.02 4.59 18.03 33.15 29.79 11.76

We have a process to assess and determine our customers’ future needs. 1.14 3.99 8.31 15.72 29.04 29.61 12.19

We accurately target our customers’ long-term needs. 1.13 3.72 6.99 15.90 35.74 26.83 9.70

We use highly developed customer-listening strategies to determine our customers’ expectations. 2.18 6.66 11.60 20.32 25.60 23.19 10.45

We use customer research information to shape new products and services. 2.31 4.75 9.26 15.63 26.85 29.28 11.92

We use customer information as the most important factor for developing new products and services. 1.62 2.66 6.94 16.44 28.59 30.90 12.85

My organization develops special processes for our best customers. 1.40 3.15 8.17 13.54 29.17 29.05 15.52

Our internal processes are designed to best meet the needs of the customer. 1.23 3.59 8.42 20.54 28.40 27.61 10.21

My organization has flexible procedures and policies that act as guidelines in meeting customer needs. 2.03 4.52 8.47 19.66 29.72 24.86 10.73

Customer Questions and Results

54


Table 25

On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s strategy regarding customers?

We assess and determine our customers’ future needs. 5.41 5.73 5.02 0.26 0.71

We believe that the business exists primarily to serve customers. 5.98 6.22 5.66 0.22 0.56

We strive to be the best in the world in providing value for our best customers. 5.86 6.20 5.47 0.28 0.74

We exceed our customers’ expectations. 5.17 5.59 4.71 0.33 0.88

We have a process to assess and determine our customers’ future needs. 5.05 5.43 4.60 0.25 0.84

We accurately target our customers’ long-term needs. 5.01 5.38 4.48 0.30 0.90

We use highly developed customer-listening strategies to determine our customers’ expectations. 4.72 5.12 4.24 0.26 0.88

We use customer research information to shape new products and services. 4.95 5.28 4.49 0.24 0.79

We use customer information as the most important factor for developing new products and services. 5.12 5.53 4.58 0.30 0.95

My organization develops special processes for our best customers. 5.15 5.48 4.88 0.17 0.60

Our internal processes are designed to best meet the needs of the customer. 4.95 5.33 4.51 0.28 0.82

My organization has flexible procedures and policies that act as guidelines in meeting customer needs. 4.88 5.24 4.52 0.22 0.72

ResponsesAll

RespondentsHigher

PerformersLower

Performers

Correlation Between



Scores

55

Table 26

Responses

How strongly do you agree or disagree with the following statements regarding your organization’s leadership?


VeryStronglyAgree

StronglyDisagree

SomewhatDisagree


SomewhatAgree

StronglyAgree

My immediate supervisor understands the strengths I bring to my job. 1.29% 2.22% 5.37% 9.11% 20.44% 39.02% 22.55%

My immediate supervisor routinely helps me improve my performance. 3.64 4.47 10.93 16.22 27.03 26.67 11.05

Employees in my organization feel comfortable disagreeing with anyone in the organization. 4.35 7.44 12.59 21.97 28.26 19.68 5.72

Our HR function is continually creating innovative approaches to increase employee effectiveness. 6.94 10.40 13.87 21.04 26.01 15.72 6.01

Our HR function is continually borrowing innovative approaches to increase employee effectiveness. 6.99 10.84 14.34 21.21 26.69 14.80 5.13

In my organization, management promotes the person who has the best skills and knowledge to do the job. 4.73 5.08 9.58 19.28 26.91 25.06 9.35

Management rewards employees who take risks to better serve customers. 4.31 6.76 11.42 22.61 26.81 20.51 7.58

Employees are rewarded for meeting customer satisfaction goals. 2.79 5.24 7.92 20.26 28.29 26.54 8.96

In my organization, everyone is clear about the organization’s performance expectations. 2.85 3.88 7.19 18.49 25.46 30.25 11.87

Employees are empowered to use their own judgment to meet customer needs. 3.78 4.47 7.91 20.18 31.19 24.54 7.91

Employees believe that their behavior affects the organization. 1.60 3.21 6.30 15.92 27.15 31.16 14.66


Leadership Questions and Results

56


Table 27

On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s leadership?

My immediate supervisor understands the strengths I bring to my job. 5.52 5.77 5.23 0.18 0.54

My immediate supervisor routinely helps me improve my performance. 4.83 5.06 4.54 0.16 0.52

Employees in my organization feel comfortable disagreeing with anyone in the organization. 4.44 4.66 4.07 0.17 0.59

Our HR function is continually creating innovative approaches to increase employee effectiveness. 4.20 4.40 3.83 0.18 0.57

Our HR function is continually borrowing innovative approaches to increase employee effectiveness. 4.15 4.33 3.78 0.17 0.55

In my organization, management promotes the person who has the best skills and knowledge to do the job. 4.71 5.04 4.19 0.25 0.85

Management rewards employees who take risks to better serve customers. 4.53 4.80 4.11 0.19 0.69

Employees are rewarded for meeting customer satisfaction goals. 4.81 5.09 4.42 0.21 0.67

In my organization, everyone is clear about the organization’s performance expectations. 4.98 5.43 4.51 0.26 0.92

Employees are empowered to use their own judgment to meet customer needs. 4.76 5.09 4.41 0.20 0.68

Employees believe that their behavior affects the organization. 5.16 5.50 4.73 0.24 0.77

ResponsesAll

RespondentsHigher

PerformersLower

Performers

Correlation Between



Scores

57

Table 28

Responses

How strongly do you agree or disagree with the following statements regarding your organization’s performance?


VeryStronglyAgree

StronglyDisagree

SomewhatDisagree


SomewhatAgree

StronglyAgree

My organization’s performance measures are clearly defined. 1.81% 3.37% 7.82% 14.56% 26.47% 32.37% 13.60%

Employees receive the training and instruction necessary to do the job properly. 2.16 4.57 6.97 17.67 28.73 31.49 8.41

My supervisor has the information and knowledge I need to do my job. 2.73 4.34 5.83 15.38 25.31 34.12 12.28

I receive the information I need to do my job from my supervisor. 3.47 4.70 9.03 18.44 26.36 27.97 10.02

I receive the information I need to do my job from my external customers. 3.36 3.49 7.88 20.54 30.62 27.00 7.11

In my organization, employees have easy access to any information within the organization that they need to improve doing their job. 2.17 4.95 8.20 21.71 27.99 25.69 9.29

When employees change jobs within the organization, they know what they must do to perform well in the new job. 2.11 5.09 7.69 22.46 32.75 23.33 6.58

My peers and others within my organization have the information and knowledge I need to do my job. 2.32 3.54 6.47 22.59 32.23 27.23 5.62

In my job, functional area, or team, we are always aware of how satisfied our internal customers are. 0.99 4.21 7.67 23.76 30.07 25.25 8.04

In my organization, we are always aware of how satisfied our external customers are. 1.00 3.36 7.72 22.29 28.64 27.77 9.22

My organization has a clearly defined and well-followed process to resolve disagreements. 3.90 7.56 15.73 23.54 24.63 19.63 5.00


Performance Questions and Results

58


Responses

How strongly do you agree or disagree with the following statements regarding your organization’s performance?


VeryStronglyAgree

StronglyDisagree

SomewhatDisagree


SomewhatAgree

StronglyAgree

Our delivery schedules for products and services are based on customer needs. 1.38 2.25 5.50 13.63 21.63 37.38 18.25

Our internal processes are designed to enable us to work together as well as possible. 2.90 4.83 9.30 20.53 27.54 26.57 8.33

Our highest priorities are on meeting customers’ needs. 0.48 1.81 3.02 12.91 18.46 36.55 26.78

We act as if customer service is only a required function rather than a critically important function. 16.38 18.61 15.63 16.38 17.12 11.54 4.34

We use leading-edge information solution technology for customer relationship management. 7.16 10.93 14.57 20.35 21.98 17.96 7.04

We seldom change our processes. 10.53 17.07 19.98 23.12 16.46 9.32 3.51

We keep current with state-of-the-market technological advances. 5.26 7.46 10.76 22.86 25.06 18.95 9.66

Our performance measures are internally focused. 3.81 6.89 13.78 28.04 28.41 15.25 3.81

Our performance measures focus on customer retention. 2.53 5.06 11.38 23.26 26.93 23.64 7.21

We use numerous direct measures for quality control of our products and services, such as cost of replacement, warranty or replacement service. 3.39 7.05 10.44 22.71 23.13 24.26 9.03

We use numerous indirect measures for quality control of our products and services, such as lost business or internal rework. 5.19 5.85 9.04 25.80 26.46 19.81 7.85

Salespeople and frontline employees have little access to competitor information. 13.11 17.21 17.90 20.90 17.35 10.11 3.42

Employees from different internal functions make sales calls together. 7.59 12.41 12.70 25.55 22.19 14.16 5.40


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Table 29

On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s performance?

My organization’s performance measures are clearly defined. 5.12 5.53 4.70 0.25 0.83

Employees receive the training and instruction necessary to do the job properly. 4.94 5.27 4.50 0.24 0.77

My supervisor has the information and knowledge I need to do my job. 5.08 5.37 4.76 0.19 0.61

I receive the information I need to do my job from my supervisor. 4.84 5.01 4.56 0.16 0.45

I receive the information I need to do my job from my external customers. 4.81 4.99 4.59 0.14 0.41

In my organization, employees have easy access to any information within the organization that they need to improve doing their job. 4.83 5.09 4.52 0.18 0.56

When employees change jobs within the organization, they know what they must do to perform well in the new job. 4.75 5.00 4.44 0.20 0.56

My peers and others within my organization have the information and knowledge I need to do my job. 4.83 5.05 4.59 0.17 0.46

In my job, functional area, or team, we are always aware of how satisfied our internal customers are. 4.86 5.05 4.59 0.15 0.46

In my organization, we are always aware of how satisfied our external customers are. 4.94 5.23 4.68 0.18 0.55

My organization has a clearly defined and well-followed process to resolve disagreements. 4.36 4.48 4.12 0.12 0.35

Our delivery schedules for products and services are based on customer needs. 5.37 5.60 5.11 0.16 0.49

ResponsesAll

RespondentsHigher

PerformersLower

Performers

Correlation Between



Scores


60


On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s performance?

Our internal processes are designed to enable us to work together as well as possible. 4.78 5.11 4.37 0.24 0.74

Our highest priorities are on meeting customers’ needs. 5.64 5.89 5.32 0.20 0.57

We act as if customer service is only a required function rather than a critically important function. 3.51 3.25 3.68 n.s. -0.43

We use leading-edge information solution technology for customer relationship management. 4.21 4.55 3.84 0.17 0.71

We seldom change our processes. 3.60 3.47 3.86 n.s. -0.38

We keep current with state-of-the-market technological advances. 4.50 4.85 4.08 0.18 0.77

Our performance measures are internally focused. 4.31 4.26 4.30 n.s. -0.04

Our performance measures focus on customer retention. 4.67 4.94 4.38 0.19 0.56

We use numerous direct measures for quality control of our products and services, such as cost of replacement, warranty or replacement service. 4.64 4.82 4.29 0.14 0.53

We use numerous indirect measures for quality control of our products and services, such as lost business or internal rework. 4.53 4.71 4.27 0.13 0.43

Salespeople and frontline employees have little access to competitor information. 3.56 3.54 3.67 n.s. -0.12

Employees from different internal functions make sales calls together. 4.06 4.21 3.88 n.s. 0.34

ResponsesAll

RespondentsHigher

PerformersLower

Performers

Correlation Between



Scores


61

Table 30

Responses

How strongly do you agree or disagree with the following statements regarding your organization’s culture?


VeryStronglyAgree

StronglyDisagree

SomewhatDisagree


SomewhatAgree

StronglyAgree

A shared value that keeps my organization together is loyalty to the organization. 1.63% 2.89% 6.90% 14.68% 26.60% 34.63% 12.67%

A shared value that keeps my organization together is commitment to innovation. 3.02 5.42 10.96 20.40 28.46 24.18 7.56

Our organizational culture is internally competitive. 2.65 6.05 14.25 20.81 30.01 20.93 5.30

In my organization, everyone working together cohesively is the most important value. 3.37 5.37 12.23 20.10 24.59 26.97 7.37

My organization emphasizes readiness to meet new challenges. 1.13 2.88 6.75 17.25 26.88 34.88 10.25

My organization’s organizational culture is externally focused on our customers, markets, and competitors. 1.51 2.52 6.17 14.74 27.71 34.38 12.97

The information and knowledge I need to do my job is spelled out in well-established procedures, practices, and instructions that are changed as necessary by my supervisor. 6.92 12.44 13.72 24.36 23.72 14.74 4.10

The information and knowledge I need to do my job is spelled out in well-established procedures, practices, and instructions that are changed as necessary by me. 5.31 7.59 10.37 23.14 26.42 20.61 6.57

If employees in my organization know they can improve work processes, they will make the changes. 1.88 2.38 9.77 22.56 31.70 25.56 6.14


Culture Questions and Results

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Responses

How strongly do you agree or disagree with the following statements regarding your organization’s culture?


VeryStronglyAgree

StronglyDisagree

SomewhatDisagree


SomewhatAgree

StronglyAgree

My organization’s grapevine is as accurate as, or more accurate than, most formal communications. 3.75 6.86 12.55 28.72 27.04 16.30 4.79

My organization’s grapevine is always faster than my organization’s formal communications. 1.80 4.77 8.12 25.26 31.31 19.97 8.76

During work breaks, employees most often talk about organization-related issues. 3.53 7.32 12.68 30.85 27.58 14.12 3.92

Most employees can find knowledgeable, informed opinions from co-workers about issues affecting the organization. 1.02 2.68 6.50 27.01 36.43 21.78 4.59

In my organization, employees need to bypass the formal organization to get things done. 9.39 17.77 21.83 24.75 16.12 7.49 2.66

Most employees would say that my organization is very safety-conscious. 0.80 3.05 5.31 17.37 26.79 29.71 16.98

Most employees would say that my organization is very concerned about employees. 2.90 3.78 6.43 17.28 25.98 31.90 11.73

In my organization, most employees participate in or show interest in the organization-sponsored social events. 2.46 3.75 7.50 20.57 30.01 27.30 8.41

Most employees think this is a good place to work. 2.01 1.88 2.76 13.17 28.73 36.14 15.31


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Table 31

On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s culture?

A shared value that keeps my organization together is loyalty to the organization. 5.16 5.50 4.85 0.21 0.65

A shared value that keeps my organization together is commitment to innovation. 4.69 5.04 4.18 0.28 0.86

Our organizational culture is internally competitive. 4.53 4.68 4.43 n.s. 0.25

In my organization, everyone working together cohesively is the most important value. 4.68 4.91 4.30 0.18 0.60

My organization emphasizes readiness to meet new challenges. 5.12 5.53 4.65 0.28 0.87

My organization’s organizational culture is externally focused on our customers, markets, and competitors. 5.20 5.55 4.84 0.23 0.71

The information and knowledge I need to do my job is spelled out in well-established procedures, practices, and instructions that are changed as necessary by my supervisor. 4.06 4.13 3.81 0.10 0.33

The information and knowledge I need to do my job is spelled out in well-established procedures, practices, and instructions that are changed as necessary by me. 4.46 4.66 4.27 0.11 0.39

If employees in my organization know they can improve work processes, they will make the changes. 4.81 5.06 4.50 0.19 0.56

ResponsesAll

RespondentsHigher

PerformersLower

Performers

Correlation Between



Scores


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On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s culture?

My organization’s grapevine is as accurate as, or more accurate than, most formal communications. 4.36 4.43 4.28 n.s. 0.15

My organization’s grapevine is always faster than my organization’s formal communications. 4.74 4.70 4.77 n.s. -0.07

During work breaks, employees most often talk about organization-related issues. 4.30 4.34 4.23 n.s. 0.10

Most employees can find knowledgeable, informed opinions from co-workers about issues affecting the organization. 4.79 4.94 4.61 0.12 0.33

In my organization, employees need to bypass the formal organization to get things done. 3.54 3.39 3.81 -0.12 -0.42

Most employees would say that my organization is very safety-conscious. 5.23 5.29 5.02 n.s. 0.27

Most employees would say that my organization is very concerned about employees. 5.02 5.26 4.57 0.24 0.69

In my organization, most employees participate in or show interest in the organization-sponsored social events. 4.87 5.12 4.57 0.18 0.55

Most employees think this is a good place to work. 5.34 5.65 4.87 0.28 0.78

ResponsesAll

RespondentsHigher

PerformersLower

Performers

Correlation Between



Scores

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Table 32

Responses

How strongly do you agree or disagree with the following statements regarding ethics within your organization?


VeryStronglyAgree

StronglyDisagree

SomewhatDisagree


SomewhatAgree

StronglyAgree

We adhere to the highest standard of ethical behavior throughout the organization. 1.00% 1.25% 3.13% 9.02% 16.17% 37.84% 31.58%

In my organization, no one would consider misrepresenting a situation for personal gain. 2.03 2.28 7.72 14.81 20.63 31.77 20.76

Table 33

Responses

On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding ethics within your organization?

All Respondents

Higher Performers

Lower Performers

Correlation Between



Scores

We adhere to the highest standard of ethical behavior throughout the organization. 5.78 5.99 5.45 0.23 0.55

In my organization, no one would consider misrepresenting a situation for personal gain. 5.28 5.39 4.98 0.16 0.42

Ethics Questions and Results

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Authors and Contributors

PROJECT LEADERJay J. Jamrog is the senior vice president of research at the Institute for CorporateProductivity, formerly the Human Resource Institute (HRI). As a futurist, he hasdevoted the past 20 years to identifying and analyzing the major issues and trendsaffecting the management of people in organizations. Jamrog is the associate articleseditor for the “building a strategic HR function” key knowledge area of HumanResource Planning, has had articles published in major business magazines, and isfrequently quoted in business publications and newspapers. He often collaborateswith, and speaks before, other organizations and associations on major research topicsrelated to the future of people management. Prior to joining HRI in 1982, he heldnumerous management positions, including vice president of purchasing for a largeimport/export wholesaler. Contact information: (727) 345-2226 or [email protected].

AUTHORSDr. Miles H. Overholt, Ph.D., is the director of systems measurement for the Institutefor Corporate Productivity. Overholt leads an international team in developing neworganizational assessment tools to measure the linkage among strategy, behavior,personality type, and individual competencies. As the team leader, he helped create the Organizational Capabilities Index (MAP—Measuring the Alignment of People—in Europe), the comparative organization tool that underlies the Institute for CorporateProductivity’s study of strategic alignment employee behavior and organizationalperformance. He has over 25 years of consulting and research expertise in organizationaldesign, change, and behavior. He is the author of Building Flexible Organizations: APeople-Centered Approach and has written numerous articles on organizational perform -ance, change processes, systems thinking, and systems metrics. His under graduate degreeis from Lafayette College, and he earned his doctorate at the University of Pennsylvania.Contact information: (856) 786-9355 or [email protected].

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Donna J. Dennis, Ph.D., is a leadership development professional with over 30 yearsof experience, helping leaders and teams increase leadership and team effectivenessthrough coaching, strategic planning, and team-building. She is known for innovative,business-focused solutions to organization and leadership issues. She holds a master’sdegree in education, a Ph.D. in human development, and certification in personalityassessment and executive coaching. Contact information: (609) 497-1997 [email protected].

James M. Lee, Ph.D., is an assistant professor of marketing at the University of Tampa.His research focus is in consumer psychology with an emphasis on personalityinfluences on decision making. Recent research publications include the use ofpersonality in personnel decisions and impact on employee burnout. Most recently he headed the marketing and IT departments of a multinational retailer, and he waspresident of the wholly owned e-commerce subsidiary. Contact information: (813)253-6221 or [email protected].

Carol L. Morrison is the Productivity and Corporate Performance Knowledge Centermanager for the the Institute for Corporate Productivity. She has a BS degree insociology/social work and a BS degree in business administration/marketing. Her careerexperience spans public, private, and nonprofit sectors. She has established and directed amunicipal government information department and headed employee communicationsfor national and multinational corporations. A senior research analyst, she is the authorof research reports on subjects ranging from change management to employeeengagement. Contact information: (727) 345-2226 or [email protected].

Mark Vickers is the vice president of research at the Institute for CorporateProductivity, formerly HRI. He has authored many reports and white papers for the institute, is the institute’s former managing editor, and is currently the editor ofTrendWatcher and The Fortnight Report. He has authored and coauthored variousperiodical articles and has served as an editor and project manager for a number ofAMA/HRI research projects. Contact information: (727) 345-2226 or [email protected].

OTHER CONTRIBUTORSVarious staff members of the Institute for Corporate Productivity providedbackground research, writing, and other support for this report. Special thanks toDavid Wentworth, who worked on the table data, and to Susan Fernandez, whoproofed the report.

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About American Management Association

American Management Association (AMA) is a world leader in professionaldevelopment and performance-based learning solutions.

AMA provides individuals and organizations worldwide with the knowledge,skills and tools to achieve performance excellence, adapt to changing realities andprosper in a complex and competitive world. Each year thousands of customers learnnew skills and behaviors, gain more confidence, advance their careers and contributeto the success of their organizations. AMA offers a range of unique seminars, work-shops, conferences, customized corporate programs, online learning, newsletters,journals and AMA books.

AMA has earned the reputation as a trusted partner in worldwide professionaldevelopment and management education that improves the immediate performanceand long-term results for individuals and organizations. For more information on howyou and your organization can gain a competitive advantage, visit www.amanet.org

Institute for Corporate Productivity(Formerly known as the Human Resource Institute)

The Institute for Corporate Productivity improves corporate productivity through a combination of research, community, tools, and technology focused on the manage -ment of human capital. With more than 100 leading organizations as members,including many of the best-known companies in the world, the Institute for CorporateProductivity draws upon one of the industry’s largest and most-experienced researchteams and Executives-in-Residence to produce more than 10,000 pages annually ofrapid, reliable and respected research and analysis surrounding all facets of themanagement of people in organizations. Additionally, the Institute for CorporateProductivity identifies and analyzes the upcoming major issues and future trends that are expected to influence workforce productivity and provides member clientswith tools and technology to execute leading-edge strategies and “next” practices onthese issues and trends.

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For more information about American Management Association

www.amanet.org • 1-800-262-9699

About This Report

This report is based on a global survey that included 1,369respondents, in-depth discussions among a team of researchers,and an extensive review of the business literature. Commissionedby American Management Association and conducted by theInstitute for Corporate Productivity (formerly the HumanResource Institute), this report:

• Takes a historical look at the literature on high-performance organizations

• Discusses the factors influencing organizational performance

• Describes the characteristics of high-performance organizations in the context of data from the global survey

• Describes what the best-in-class practices may look like in the year 2017

• Provides a detailed look at the results from the AMA/Institute for Corporate Productivity High-Performance Organization Survey 2007

American Management Association • New York

Management Centre Europe • Brussels

Canadian Management Centre • Toronto

American Management Association • Mexico City

American Management Association Japan • Tokyo

American Management Association China • Shanghai

high performance07

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